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Failed Bush Economic Policies - Trade Deficit grows, grows, grows ...

Last Friday the Commerce Department released the January, 2005 Trade Deficit figures. In many news media articles there was an interesting statement concerning the new age rocket scientists called economists. They were surprised at the size of the Trade Deficit.

Now some might take heart in that statement and say, Wow - they are waking up. But such would be nothing other than pie in the sky. These rocket scientists were not surprised that we had an unsustainable level of Trade Deficit, but they were surprised by the amount.

The Trade deficit was $58,300,000,000.00 and they were only expecting $56,000,000,000.00!

Now take that "expected" amount of $56,000,000,000.00 and convert it to an annual Trade Deficit and it would be only $672,000,000,000.00  Are we to believe that our country's leading economists are not concerned at all about an annual Trade of $672 Billion Dollars?

It is certainly an eye opener, at least from our perspective, that so called and self professed economists have become a toothless watchdog.

Well we are not surprised at the size and expect our Trade Deficit to continue to grow until something changes the policies that create it, or foreign countries quit extending credit to our country.

For 2005, we will publishing the month by month statistics in a different chart than we used last  year.
 

As you can see by this very simple chart using the government's own numbers the Trade Deficit is moving in the wrong direction. As this trend continues, at some point one must begin to question our elected officials who tell us that this is "good for us."

Below we have included the government's own graph of the Trade Deficit since the 1980's. Remember this is the government's own graph, not one we made.

The source for the graph is: http://www.bea.gov/bea/newsrelarchive/2005/trad0105annual_fax.pdf

It does not take one of the new age rocket scientists, called economists to look  at the the government's own numbers and determine that something is dreadfully wrong. Our international Balance of Trade is a constant Trade Deficit and ever since the recent advent of the Free Trade Era our Balance of Trade has been going down, down, down ...

How long must our international trade position deteriorate and get worse before before we even begin the debate on how to fix it? Apparently the Bush Administration is willing to continue his policy of corporate welfare through the rest of his Administration.

Meanwhile American jobs continue to move to foreign countries at an increasing rate. Even if all of our remaining factories began to operate at 100% capacity and export the increase above the current 79% capacity we could not manufacture enough products to bring the Trade Balance back to a positive position!

Think about what that means!

Under the Free Trade policies we have destroyed our capability to have a positive international trade position.

The Republicans and Democrats tell us that empty factories, call centers, processing facilities create more jobs than full ones. That empty factories produce more products than full ones. That empty call centers and processing centers produce more services than full ones.

You do not need to be a rocket scientist to figure out the fallacy of the production capacity between an empty facility and a full one. About the only people who are impressed with the productivity of empty factories are individuals whose elevators miss a few floors or politicians more concerned with campaign contributions than the citizens' well being.

But it is easy to present the government's own numbers and demonstrate the problem. As promised - in our next article we will present not just a statement of the problem, but will present some steps that we believe could begin to correct the problem.

In the meantime give some thought to how big the Trade Deficit will be in say another ten years if the current trend continues. If you believe that increasing the Trade Deficit to those levels is a major or even a minor problem that requires attention then you should find the next article of interest.

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