The new age rocket scientists called economists are claiming that these alarming numbers are the result of rising oil prices. Sounds good doesn't it, the siren song remains the same - "The US economy remains strong and the trade deficit is a result of increasing oil prices."
But a look at the actual numbers, some call these - facts - does not support this siren song:
Total Imports: $165,600,000,000.
If we didn't import a drop of oil, we would still have a trade deficit for June of $38,900,000,000.
The truth remains the same:
Meanwhile the Bush Administration and leading Congressional leaders of both parties have passed CAFTA (See: CAFTA passed House by two votes ... ) agreement seemingly oblivious to the long term implications of these failed economic polices. In fact what they call "Free Trade" is misnamed, it is "Expensive Trade" and since this idea narrowly passed Congress in 1992 (NAFTA) our country's international trade position has steadily deteriorated. Now they are setting their sights on the next Expensive Trade Agreement, the FTAA mis-named the Free Trade Area of the Americas.
Take a quick look at the chart on the left. Now remember this is the chart provided by the US Commerce Department.
This is not a chart of success it is a chart showing the results of a failed policy.
In our life times this country has made the transition from the world's largest creditor nation into the world's largest debtor nation. That is not the legacy of a successful policy.
It should be obvious to all that such levels of debt accumulation can not continue forever. But instead of beginning to look at these trends in a realistic manner, our elected officials seem content to ride the downward slope.
To repeat the basics:
Trade in Goods
When Americans need the products those factories used to produce they have to buy imports. As long as more factories move to foreign countries than move to our country, we will export less and import more!
The Expensive Trade Agreements - misnamed Free Trade Agreements are resulting in moving factories and goods producing facilities to foreign countries. CAFTA which was recently shoved through Congress will only create more empty factories - resulting in Americans having to buy more imports.
Trade in Services
Every time an American company outsources jobs to a foreign country, those services are no longer available to sell to foreign companies and are now imports. While we still have a trade surplus in services it is shrinking and at the current trend will be a deficit around the end of this year.
From the US Department of Commerce own numbers for June: Services exports increased $0.1 billion from May to June. Services imports increased $0.2 billion from May to June. The trend continues, another $100,000,000 of "good for us" outsourcing!
Agriculture has been producing a positive trade balance for decades. But even this mainstay of American Trade is sliding toward a negative balance. In May, Agriculture was down to breakeven, continuing the trend downward toward a deficit in what has been a positive balance for decades:
In conclusion - every component of international trade is on a downward trend. There is one category that shows the extent to which President Bush's economic policies are destroying our international trade position - advanced technology. Now most would believe that our country leads the world in advanced technology, which at one time we did. But no longer:
Even in advanced technology products - empty factories and development centers do not generate much! And the trend continues.
American jo bs that are sent to another country have something in common with empty factories, call centers and development centers. A lot of Americans who used to think every thing was going well - used to work there.
How Continuing Trade Deficit affects you, the citizens
Some may ask, "Why should I care?"
The answer to that will fall into two categories; those that are directly affected and those who are not.
Not directly affected:
The continuing downward trend of our Trade Deficit is a formula for disaster.
A couple months ago the new age rocket scientist, Alan Greenspan stated that we had a problem, that ever increasing Trade deficits can not continue forever. Then Warren Buffet echoed our claim that the Bush policies are destroying your grandchildren's future
Meanwhile the Bush Economic Polices continue their march into our country's history. Seemingly oblivious to the long term effects of these economic policies the Bush Administration continues to feed the public one crisis after another while using the power of the government to build "political capitol" (see: Bush Trade Policy - a look behind the scenes of a failed economic policy - its ugly! ).
We no longer have the capacity to produce enough goods to balance the Trade deficit. This was recently confirmed in a report in a Chicago paper (http://www.suntimes.com/output/business/cst-fin-hale10.html):
If all of our remaining facilities ran at 100% capacity for the rest of the year and exported every bit of additional product - we would still have a trade deficit! But instead of polices to increase utilization and capacity of our facilities we have government polices in place which encourages their relocation to foreign countries!
Until the failed policies are changed - there is nothing to stop the downward trend!
Lets repeat that statement, it is very important:
There should be little question about the effects of the current economic policies. The trends are so obvious that you do not even need to be a rocket scientist to figure out where they are headed. Do not be misled by small month by month fluctuations. Our international trade position is steadily deteriorating.
It is up to you the American citizen to decide how long - you - are going to let it continue. The most recent Expensive Trade Agreement - CAFTA - was passed by the narrowest of margins in the US House of Representatives, by one vote. Many of you have voted for and supported members of Congress that turned their back on you under intense Bush Administration and corporate lobbying. You have the power to "retire" these corporate representatives and get replacements who will represent you - not special interests. Every one of the US Representatives that voted for CAFTA (Roll Call Vote: http://clerk.house.gov/evs/2005/roll443.xml#Y) is up for election next year. Are you going to send them back so that they can vote for FTAA?
The Southern Party has released a position statement that would change the failed and misnamed "free trade" to one of FAIR Trade (See: A Southern Party of Georgia Position on solving our country�s Trade Deficit ). If you are concerned about this issue - we hope you will take a few minutes to read this position statement. We also appreciate any help in passing this information on to others.
Excellent Reference site:
Several of the charts and graphs that are used on the Southern party web site are from this excellent web site. We recommend that you visit it frequently and spend some time reading the variety of economic reports available.