We Can’t Continue Like This!
We Are Living on Imports and Debt
This is unsustainable. The facts speak for themselves:
- Our trade deficit is now around $600 billion. This means we are sending $1.2 million out of the country every minute, on average
- The yearly budget deficit is approximately $1 trillion
- Accumulated national debt is over $16.4 trillion
- Total consumer debt in the U.S. is $11 trillion
- Student loan debt is approximately $1 trillion
We are racking up this debt at an unprecedented rate, and there is no end in sight. We have been living on deficits and debt for years and are not producing enough to ever pay these debts. We haven’t had a trade surplus in 37 years!
We must stop this way of doing things immediately, or our money could be worthless before we know it. This is not conjecture, it is an inevitability if things continue as they have been.
How can (must) we do this?
We need to fix our trade deficit, and that means we need to stop free trade immediately. Free trade allows unrestricted, uncontrolled access to our economy for goods made overseas at labor costs far below ours, sometimes as low as $2 per hour, tariff- and duty-free. We cannot compete with these labor costs, so we must outsource our manufacturing or see our factories go bankrupt. This renders us uncompetitive and sends the middle class jobs we once depended on overseas, devastating our economy.
We must strategically use tariffs, as we have successfully done in the past. Tariffs were the major source of income for the Federal government for much of our nation’s history. More importantly, though, they helped to protect America’s industries from foreign competition and allowed America to become the world’s most productive nation. Many of our most successful presidents, including FDR, Kennedy and Reagan, have used tariffs to help our nation’s economy, yet we have neglected them recently, to our detriment.
We must also reform our tax system, and institute a Value-Added Tax (VAT). The VAT is used successfully by most of our competitor nations, and many respected American politicians, such as former Senator Ernest Hollings, have proposed a VAT as a way to jump-start our economy. Senator Hollings states that by lowering income taxes, eliminating the corporate tax and using a VAT we could bring in substantially more income for the United States while creating jobs, leveling the playing field on trade, and spurring investment in domestic production.
The VAT would also allow companies to repatriate the trillions in funds they currently hold overseas and reinvest them in the United States, encouraging domestic production.
We can still get our country back on the right path, but we must immediately stop our failed “free trade” policies and return to policies that work for the United States.