Economic Problems Facing the U.S.

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The United States is facing economic disaster on a scale few nations have ever experienced. Most people are unaware of the easily observable signs of this crisis, where it came from and how to stop it. While we persist in our superpower mentality, we have quietly become a second-class country in many respects.

We no longer produce what we need to sustain ourselves, we import much more than we export, and we are selling off our assets and taking on massive debts to sustain a standard of living we can no longer afford. Not only was this not the way we became a superpower but it is a sure way to lose this status.

The game plan of our international competitors is to render us completely dependent on foreign production, innovation and financing. In losing domestic self-sufficiency, national security and leverage – our foreign affairs has begun to suffer greatly, and America’s superpower status is coming into question.

We are failing even to acknowledge predatory foreign trade practices undermining U.S. industry. For example, China’s currency manipulation has cost the U.S. millions jobs. Instead we encourage U.S. manufacturers to design, engineer, and produce in third world markets like Mexico and China.

First we should take direct action to reverse our out-of-control trade deficits. While our regulatory and tax systems have unnecessarily raised domestic business costs, the fundamental cause of the present crisis is three decades of extremely detrimental U.S. trade and globalization policies. Under these policies American manufacturers cannot compete with workers in third world countries who often make $4 an hour or less. Due to these failed policies we have had a negative balance of trade of over 10 trillion dollars in the last two decades.

Estimates have shown that for every 1 billion in trade deficit that we have we lose 9000 jobs. With a total of over 10 trillion dollars and growing we have lost over 12 million jobs.

Second, we must carefully manage access to our markets. We should not naively rest on the faith that other countries will hold themselves to our standards in areas such as the environment, labor and competition policy. These standards affect the cost of production. If other countries fail to adhere to these standards, they gain an unfair cost advantage.

Access to our markets must be therefore conditioned on a strategic analysis of our own national needs first and foremost. As things stand, we have handed our sovereign rights to our domestic markets to international bodies like the World Trade Organization and are committed to disastrous “free trade” agreements such as NAFTA, CAFTA, and KORUS . We are in a dramatically different position from emerging low-wage markets.

Our policies should carefully protect our wealth and resources rather than simply provide the lowest consumer cost regardless of the impact on our industries and our workers. By implementing a border consumption tax as part of a competitive tax plan we can ensure American manufacturing is protected and that our nation remains competitive with the rest of the world.

Finally, dramatic new direction is required. Promoting open markets and economic growth abroad will not alone re-balance America’s trade accounts and domestic industrial collapse. Our industries have been so disarmed and dismantled that we now lack the knowledge, capacity and investment capital to facilitate self-sustaining production. We must make sure to invest in our infrastructure and new technologies that make American manufacturing competitive with the rest of the world.

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2 Responses to Economic Problems Facing the U.S.

  1. BIGuru says:

    “Our industries have been so disarmed and dismantled that we now lack the knowledge, capacity and investment capital to facilitate self-sustaining production. We must make sure to invest in our infrastructure and new technologies that make American manufacturing competitive with the rest of the world.”

    Not very many high end people know this. You can not compete with OLD technologies and fight against rest of the world. That is why, you need NEW technologies. I have been saying that for five years and no one pays any attention to the point funding has dried up at EIC. A simple solution is for NEW technologies coupled with work together for new IDEAS and not use TPP to mess with China or use old technologies in managing low level intellectual capital like they do in Hollywood, Pharmaceuticals and GMO structure.

    To do that, you need Advanced Industrial Ecosystems that is better than present China’s Basic Industrial Ecosystems. It is difficult but without it, you would not go anywhere up. Please do not try to fight the last battle and follow old methods to solve this. It has never happened with the present ideas. Like Einstein said: “The problems that exist in the world today cannot be solved by the level of thinking that created them!” Who am I to argue with that?

    Hence the solution is with Advanced Industrial Ecosystems…..Even EIC should jump in. Thank you.

  2. BIGuru says:

    You have to do NEW items…Old items is not the path. But to understand NEW, it is not there already proven…just the IDEA…otherwise it is not NEW. For example, Tesla is doing a super Lithium-ion battery system. That is just great…but the interesting part is one can use Aluminum ion base or SIMILAR batteries of the future at more than twice the Energy per weight. Once you have those developed and make it quicker… then you are solving the goal of new economics. There are tons of those items that we can produce to change the game plan. Unfortunately no one talks about it including EIC. So what is the deal here?

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