Information about Taxes, Government Spending and the Economy
Trade Deficits - product of failed economic policy 

Another step toward globalization ... every month a step closer!
by Mike Crane

The May 2006 Trade statistics were released on July 12 and it should not be a surprise to anyone that our international trade position has deteriorated further.  The May 2006 Trade Deficit was $63,800,000,000.00, the worst May in the history of our country. In fact - the first five months of 2006 show an increase in the trade deficit of $35.5 Billion over the all time worst record in 2005.

These are the governments numbers not ours! The chart below has been filled in month by month by simply copying the current trade deficit from the government's monthly press release (included at bottom with web site link).

These are not good statistics. These are not good signs for the future. These are not the results of a successful economic policy! These statistics show that we are headed for another all time record increase in our trade deficit for 2006!

The first five months of 2006 show a 12% decline over 2005 already! The first five months of 2006 are more than double the first five months of 2001!

Instead of "improving" we are marching down the path of globalization month by month! Have you given any thought what that means to your future, your children's future and most especially your grandchildren's future? If not I hope and pray that you will begin to.

I have and I am very concerned about the future of my 10 grandchildren!

President Bush is destroying Our Founding Principles as fast or faster than any President in our history. He is pushing "globalization!" He tells us this is good for us! How in the world can it be good for us to run an ever increasing deficit that everyone knows can not continue?

What is Globalization?

Lets look at what his idea of globalization means to you, your children and grandchildren. The following is in approximate numbers and only looks at the impact of a true global economy between our country and India. The impact is of course greater when you factor in the entire world.

Globalization: The Politicians pitch: Free Market forces will eventually solve the problem. Rising incomes in foreign countries will stabilize the situation.

Explanation:  Using some round representative numbers (references at bottom):

US population 300 Million, Average per capita income - $33,000 per year

India population 1 Billion, average per capita income - $472.00 per year.

Equalized income between US and India - $7,978.00 per year.

What that means to you: Average American income will fall dramatically.

If we achieve globalization - if the current economic policies are maintained the American average per capita income will have to fall to $7,978.00 per year - for the per capita income in India and the US to equalize.

Effect on your grandchildren: You are condemning your future generations to live on the equivalent of roughly $8,000.00 current dollars.

Ladies & Gentlemen, this is what we are leaving our children and grandchildren if globalization continues unabated. Except it is actually worse than the above example indicates. That example only considers the population of India, globalization carried out would include not 1 Billion people as in the example, but would include somewhere around 5 Billion.

Is this what you voted for? Well it is what you are getting and it is brought to you by both the Republican and Democratic Parties leadership!

The Trade Deficit is just one piece of a complicated picture and our elected officials depend on the picture being so complicated that the citizens of our country will not realize what globalization really means. You do not hear this from either of the major parties because they are addicted to the contributions of the proponents of globalization. What a corporate dream, everybody working for poverty wages - except the elite few!

Warren Buffett - hardly a Southern Party member - has come to the same conclusion:

Instead of moving toward an "ownership society," Buffett suggested, with admitted hyperbole, that the economic burden ahead is more likely to result in a "sharecropper's society" dependent on foreign landlords.

Think about that as you read the rest of this article.

Lets look at the government's own chart (US Commerce Department) for recent years. This is not a chart of success - it is a chart showing the results of failed policies for the last few years. Many do not realize that citizens of my age (I am 57) grew up in a time when our county was the world's leading creditor nation. Youngsters today are growing up in a time when our country is the world's greatest debtor nation.

All of you know that debt can not increase at these rates forever!

Somebody will have to pay the price for this fiscal irresponsibility!

Will it be us, the adults whose watch this is occurring on - or will it be your  children - or will it be your grandchildren? I hope you will give that some thought, if you do - you will know what the right thing to do is.

Continued Decline

Factories, call centers, development centers, financial centers and whole industries are moving to foreign countries and will continue to do so until these failed economic policies are changed.

Empty factories and other facilities do not produce goods to be exported, even if President Bush, Congress, Republicans and Democrats tell us this is good for us, empty factories just do not produce much!

When Americans need the products and services those factories and facilities 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 chart on the right shows the long term trend of lost factories as a percentage of the working population in our country. These are jobs moved to foreign countries, so that we lose both the income and have to buy imports.

Meanwhile the Bush Economic Polices (and previous President Clinton's) continue their march into our country's history.

Seemingly oblivious to the long term effects of these economic policies the Bush Administration continues the march to globalization!

If all of our remaining facilities ran at 100% capacity this 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:

Until the failed policies are changed - there is nothing to stop the downward trend!

The mushrooming Trade Deficit and Budget Deficits are creating over $1,000,000,000,000,000.00 - 1 Trillion Dollars of debt per year! That is over $3,300.00 of new debt for every man, woman and child in our country - per year! There are very few options on eliminating debt:

1) Repudiate it - At a national level  - would mean the US default on all securities and collapse of our economy. At the corporate level means closing the doors and layoffs and reductions in salaries for those remaining on payroll. We are seeing the corporate level effects already.

2) Devalue the dollar - The long term trend is a devaluation of the dollar. This means in effect an effective lowering of American income in relation of the rest of the world and higher import prices. The dollar is declining against major currencies. The Bush Administration is demanding that China let the dollar "decline" against their currency.

3) Inflation - Means you get less value for your dollar so it is in effect worth less.

4) Raise Taxes - Tax rates are rising if you include all of the hidden and embedded fees, costs and regulations.

5) Liquidate assets - This is in effect selling American assets to foreign entities and is the major source of funding for our current debt. Should this be our national policy? The list of foreign owned - former American companies - is staggering and growing.

With the exception of national repudiation of debt, the other forces above are all in play now, and are the mechanisms that will lower American per capita income to match the rest of the world. You are seeing the small steps in the march to globalization on an ongoing basis. Step by step you are marching toward globalization. Step by step - your grandchildren's future is being sold on the auction block of special interest influence. Before "political correctness" it would have been called by its real name - "corruption."

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 us have voted for and supported members of Congress that turned their back on us under intense corporate lobbying.

You have the power to "retire" these corporate representatives and get replacements who will represent us - 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 expensive trade agreements with Panama, Colombia, Ecuador, Peru, Thailand, Tunisia, the UAE, Kuwait, Botswana, South Africa, Lesotho, Swaziland, and Namibia, Russia, Ukraine, Vietnam, Kazakhstan, Peru and Qatar and who knows where else?

They are all in process and so far the Democratic and Republicans in Congress have not rejected a single expensive trade agreement since NAFTA in 1992! Just what we need - more empty facilities; less jobs, less exports and more imports. Is this what you want for a national policy?

Perhaps we need less Republicans and Democrats, but that is up to you - the citizens. You get what you vote for and you are getting globalization whether you want it or not! You are allowing these elected officials to sell your grandchildren's future with impunity.

You are told that if you support a non Republican or Democrat that you are throwing your vote away! Now isn't that very cozy for the two parties that have implemented these failed economic policies. As long as they have a monopoly, you have less choices and they have less competition. So what you get is - globalization!

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).

Unless something is changed, we are marching down the path to globalization. Our children and grandchildren are being dragged along with us and will face the consequences of our actions and pay the price for our irresponsibility.

When President Bush gave his recent speech in India, where hundreds of thousands of American jobs have been outsourced, he clearly indicated that there are no plans to change these policies. These policies are designed to implement "globalization." We close by repeating what this really means:

Globalization: The Politicians pitch: Free Market forces will eventually solve the problem. Rising incomes in foreign countries will stabilize the situation.

Explanation:  Using some round representative numbers (references at bottom):

US population 300 Million, Average per capita income - $33,000 per year

India population 1 Billion, average per capita income - $472.00 per year.

Equalized income between US and India - $7,978.00 per year.

What that means to you: Average American income will fall dramatically.

If we achieve globalization - if the current economic policies are maintained the American average per capita income will have to fall to $7,978.00 per year - plus or minus roughly $1,000.00 - for the per capita income in India and the US to equalize.

Effect on your grandchildren: You are condemning your future generations to live on the equivalent of roughly $8,000.00 current dollars.

We appreciate any help in passing this information on to others.

“Nobody made a greater mistake than he who did nothing
because he could only do a little.”
― Edmund Burke (1729 - 1797)

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References for per capita income:

US per capita income (2004): Reference  http://www.vtlmi.info/pcivt.htm

India per capita income (2004) is 20,989 Rupee (see: http://timesofindia.indiatimes.com/articleshow/1009693.cms). Using the Dollar <-> Rupee currency conversion rate of March 10, 2006 (.02249), this is $472.00 per year per year.

Methodology - Multiply population estimates by per capita income for both countries, add the total income and divide by combined population.

US - 300,000,000 people x $33,000.00 = $9,900,000,000,000
India - 1,000,000,000 people x $472.00 = $472,000,000,000
Total = $10,372,000,000,000 divided by 1,300,000,000 people
Result = $7,978.46

About the author:

Mike Crane is the 3rd vice chairman of the Southern Party of Georgia and a candidate for the 51st Senate District in Georgia. Georgia has the hardest ballot access laws in our country and your contribution and support is needed to help achieve ballot status. Help a voice for fiscal responsibility get on the ballot so that the people have a real choice. No contribution is too small:

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Morganton, Georgia 30560

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