Simple Solutions for America’s Complex Problems
The United States has been in the red for decades. From 2000 through 2012 alone the U.S. lost $8.4 trillion through an unbalanced trade deficit. The U.S. imports far more than it exports. In addition, the nation has a debt of over $17 trillion. Rather than creating wealth by manufacturing, we are pretending to create wealth by printing money. This is not sustainable.
Since China entered the World Trade Organization (WTO) in 2001 through 2008, U.S. trade with China has resulted in the loss of 2.4 million jobs, according to the *Economic Policy Institute. The states hit the hardest during this mass exodus were California (370,000 jobs), Texas (193,700), New York (140,500), Illinois (105,500), Florida (101,600), Pennsylvania (95,700), North Carolina (95,100), Ohio (91,800), Georgia (78,100), and Massachusetts (72,800). (* All numbers were current as of 2008, their most recent study.)
More than 40 percent of our trade deficit with China is due to rapidly growing computer and electronic imports. By leaving the WTO, we could put equalizing tariffs on products coming from China, potentially bringing back over 1 million jobs in computer and electronics, computer accessory manufactured goods and fabricated metal production, as well as professional, scientific, and technical services. There would no longer be any compelling reason to manufacture needed products overseas, and the money earned through tariffs could be used to stimulate the economy without borrowing from competitor nations. Our largest creditor nation is China.
Once out of the WTO, the next step must be rewriting our trade deals. We are currently in one-sided “free” trade pacts like the North American Free Trade Agreement (NAFTA). These have put us at a major disadvantage, in both the global economy and our economy at home.
These lopsided “free” trade deals put American workers in direct competition with workers in other countries who earn much lower wages. To produce here in America, manufacturers would need to pay their workers $18-20 per hour. That same product can be produced right across the border in Mexico, at wage rates of just $4 per hour, and then shipped back to the U.S. duty- and restriction-free. The United States has literally incentivized the off-shoring of American jobs through “free” trade and tax breaks to companies that outsource. This trend must stop immediately.
This is why America is failing – we don’t make anything of real value anymore.
For America to succeed, the government must become more involved. Tax reform, including tariffs, is needed to provide incentives to bring American manufacturing back. Companies must be given disincentives for offshoring American jobs. Most importantly, the backing must go to American companies, not to foreign-owned American-registered companies, to keep American wealth in America.
Until the nation learns to keep the dollar home and balance its trade, we will just keep failing. But the U.S. cannot balance trade so long as it is in failed free trade agreements and a member nation of the WTO, which doesn’t let America’s elected leaders work for the best interest of the nation. Americans must push their politicians in Washington to get out of these flawed agreements immediately.