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Understanding the Trade Deficit
Foreign Companies Are Buying Out The US Through Our Trade Deficit
Over the past 30 years, we have been giving dollars to foreign countries and they have been giving us finished consumer goods. Some of those dollars have stayed abroad, some have come back to purchase interests in our companies, governments, and our factors of production. This has been evidenced by massive foreign direct investment especially over the past 15 years and massive net international investment deficits by the US over the same period. They have given us luxury cars and we have given them the keys to our factories.
The US Must Invest In Domestically Owned Tradable Production
When foreign countries decide to stop accepting dollars in exchange for consumer goods, what guarantee is there that they will come to this country to buy goods and services? We don’t make anything that they want now (as evidenced by the trade deficit). At the very least, we are not competitive now, what assurance is there that we will be competitive in the future? Will our labor rates and working conditions need to recede to those of China, India, or Mexico? How will we pay for this? What will we do, we don’t produce the goods we need. How long will it be before other countries are no longer willing to extend credit to us?
We were competitive with the rest of the world when the rest of the world was not functional after WWII, the rest of the world was destroyed and we were the only game in town. We could make all the mistakes we wanted and still come out ahead. Things are very different now.
Massive Amounts of American Dollars Are Being Spent On Imports
At present, too many of our dollars are spent on manufactured goods are spent directly on imports. In some industries such as electronics, computers, transportation equipment, and machinery, the amount spend on foreign goods gets even higher.
The US Service Economy Cannot Keep Our Country Afloat Indefinitely
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Over the past 30 years, we have been giving dollars to foreign countries and they have been giving us finished consumer goods. Some of those dollars have stayed abroad, some have come back to purchase interests in our companies, governments, and our factors of production. This has been evidenced by massive foreign direct investment especially over the past 15 years and massive net international investment deficits by the US over the same period. They have given us luxury cars and we have given them the keys to our factories.
The US Must Invest In Domestically Owned Tradable Production
When foreign countries decide to stop accepting dollars in exchange for consumer goods, what guarantee is there that they will come to this country to buy goods and services? We don’t make anything that they want now (as evidenced by the trade deficit). At the very least, we are not competitive now, what assurance is there that we will be competitive in the future? Will our labor rates and working conditions need to recede to those of China, India, or Mexico? How will we pay for this? What will we do, we don’t produce the goods we need. How long will it be before other countries are no longer willing to extend credit to us?
We were competitive with the rest of the world when the rest of the world was not functional after WWII, the rest of the world was destroyed and we were the only game in town. We could make all the mistakes we wanted and still come out ahead. Things are very different now.
Massive Amounts of American Dollars Are Being Spent On Imports
At present, too many of our dollars are spent on manufactured goods are spent directly on imports. In some industries such as electronics, computers, transportation equipment, and machinery, the amount spend on foreign goods gets even higher.
The US Service Economy Cannot Keep Our Country Afloat Indefinitely
.
.
.
.
.
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