It’s Not Rocket Science, But It Will Work!
Cut Imports By 25% To Fix The Economy and Jobs
With all the furor in Washington over competing budget and national debt reduction plans, why is the huge U.S. trade deficit never mentioned as our biggest single economic problem by either Republicans or Democrats or by President Obama ?
Here’s why. Our leaders thought the new world of globalization meant we should expand abroad and not worry about preserving our own market even though it’s the world’s biggest and richest.
Keep the following figures in mind about our trade deficits. Since Washington adopted wide-open, one-sided “free trade” policies in the early 1970’s under President Nixon, our trade deficits have totaled more than $8 trillion, and we’ve never had even one annual trade surplus since 1975. Borrowing the funds to pay our foreign creditors for those losses has caused the greatest transfer of wealth from one nation to others in all of world history. It’s no wonder we are far short of funds for balanced budgets or to make payments on the $17 trillion national debt.
So what can we do to correct this colossal mismanagement of our nation’s finances and world leadership? Answer; immediately
- Reinstate a policy of maintaining total annual balanced trade with the rest of the world
- Enact legislation to reduce total annual imports into the U.S. by 25% within a two-year phase- in period while U.S. production is rebuilt to replace the reduced imports.
To size the problem and opportunity, U.S. annual imports of goods are currently about $2.0 trillion and our exports about $1.5 trillion for a deficit of $500 billion, so a 25% reduction in Imports would eliminate the annual trade deficits. We’d still be One of the very biggest world importers – that’s not “protectionism.
So what? How would that help on the budget and debt debates? Answer: the two sides are about $500 billion apart in their annual budget projections, so the $500 in income and 4% saved in GDP by eliminating the trade deficit would close that gap. It would also make $500 billion available for debt reduction. More importantly, we’d be earning our way in the world by putting our people back to work making things for our daily needs and preserving a strong industrial base for national security!