Trade Deficit: September - 2008 - Current financial crisis is tip of iceberg
by Mike Crane

"Foreign interests have more control over the US economy than Americans, leaving the country in a state that is financially imprudent. More and more of our debt is held by foreign countries – some of which are our allies and some are not. The huge holdings of American government debt by countries such as China and Saudi Arabia could leave a powerful financial weapon in the hands of countries that may be hostile to US corporate and diplomatic interests."

David Walker, the US comptroller general. 23 July 2007.  http://business.timesonline.co.uk/tol/business/markets/united_states/article2120735.ece

The September, 2008 Trade statistics were released in November and remained at a very high and unacceptable level.  This article is of course a couple months later than usual. But with the 'financial market crisis" and "massive bailouts" getting 24 hour news coverage, it was obvious few cared about the trade deficit. The media, the talking heads and elected officials are just absorbed with other things. But now that the roughly trillion dollar "stupid plan aka bailout plan" has shown to be inadequate, these articles will resume.

The chart above is taken - month by month - from the U.S. Bureau of Economic Analysis monthly press releases. These are just the numbers reported by the government. A copy and link to the most recent BEA press release is always at the bottom of the page.

The month of September, 2008 was tied for the third worst September trade deficit in our country's history. Up until the day that the current "financial market crisis" exploded, your government officials were saying that the "economy" was showing a few weaknesses, but was still strong. But as all now know that was not true. So in the middle of the now discovered "economic crisis" our trade deficit is still at unacceptable levels. It still shoes that our wealth is being transferred to foreign countries at an alarming rate.

Sadly, the "financial market crisis" is just the tip of the iceberg. We, the people, have a mountain of debt moving toward us like a mud slide. Have you ever seem a mud slide in person or on TV? It is a sight to behold, it sweeps everything in it path. Even as an enormous amount in excess of $700 Billion dollars ($700,000,000,000.00) of your money is being spent to prop up financial institutions with much hoopla, that much money flows out of our country every year! But up until last summer our elected officials were telling us how strong our economy was - now they are fighting over how much more of your grandchildren's money needs to be handed out.

But they never, never will admit that it is THEIR failed economic policies that are causing our crisis until you - the citizens demand it! They are doing OK, why should they care about you?

Let's repeat that for emphasis. 'That much money flows out of our country every year!" The "financial markets crisis" is just the tip of the iceberg. Due to the lack of fiscal responsibility and "big government" failed economic policies of the Republican and Democratic parties this mountain of debt is moving towards us like a mud slide. --- Each crisis will be treated as a surprise, and you will pay the price for each, unless you the citizens made a fundamental change in our elected government.

The chart at the left shows the trade deficit excluding all petroleum products. So even without the purchase of a single drop of oil we would still have very high trade deficits.

When you hear politicians blaming our unacceptable international trade position on oil, just remember this chart. They are not being completely honest with you! Before political correctness such lack of honesty was called by more descriptive terms.

Tracking an Expensive Trade Agreement - NAFTA

In January this year - we started tracking our trade with our NAFTA partners [sic].  In just January through September we have a trade deficit over $114,278,000,000.00 or 114.2 Billion USD.

Note that NAFTA was passed by a very narrow margin in 1992 and supported by both Democratic President Bill Clinton, and the 1996 Republican Presidential nominee - then Senator Bob Dole. So NAFTA was brought to us by both the Republicans and Democrats.

In this years Presidential campaign Republican John McCain was the most outspoken supporter of not only NAFTA but voiced strong support for increasing the number of such agreements to include other countries in this American job sweepstakes.

Our new President Barack Obama voiced support for the so-called free trade agreements but used some campaign rhetoric suggesting that these agreements are OK as long as we add more government regulations for worker protection (read - re-training benefits when your job is shipped to a foreign country) and environmental taxes.

So nothing is going to change from this years Presidential election.

We lost the election before the first vote was cast!

It is hard to see where we benefit from a trade deficit of $114,278,000,000.00 with these two countries in just nine months!

Possibly a truer statement would be that both Canada and Mexico have many thousands of families that now benefit from jobs that used to support families in our county.

When you voted for either the Republican Presidential nominee OR the Democratic Presidential nominee this year, I hope you said a prayer for the American families that will lose their income from continuing the great American jobs sweepstakes known as "Free Trade Agreements." Of course you now get to pay for their defunct mortgages to boot!

The now empty and vacant facilities (and the ones that will become empty) that used to produce these products in our country do not employ very many people.

• You can sit in the parking lot of a vacant facility at shift change time and you do not see many employees leaving or coming to work

• You can sit in the parking lot of a vacant facility and you do not see many trucks leaving to take products to market.

• How many of the mortgages that are causing the current "financial market crisis" would be in current status if these facilities were still employing American citizens?

However in some foreign country, for NAFTA this would be Mexico or Canada,  the story is different:

• At shift change time you will see a lot of employees both coming and leaving, and on certain days they will have paychecks, many paid by you!

• Sitting in the parking lot you will see trucks leaving - loaded with products.

• Soon you will be able to follow these trucks as they roar through our country on the NAFTA Super Corridor (paid for by you) to an "inland port" (paid for by you) and then to your local store.

Regardless of the campaign rhetoric, the track record the last few decades speaks louder. For years we got rhetoric about our strong economy - but it was propped up by a growing mountain of debt! 

Now we get rhetoric about our unforeseen economic crisis and the answer is to continue the failed policies and just create more debt! For years as this debt grew all we got was rhetoric about how strong our economy was. Now the federal government, supported by both Republicans and Democrats commit billions of tax payer guaranteed dollars to bail out failing industries and banking institutions.

But the leading Democrats and Republicans get record levels of campaign contributions and are sent back election after election - so nothing changes.

Foreign Debt

Now a brief look at the impact of year after year of our failed economic policies: Take a look at the chart on the right. This is a graph, using the governments own numbers of the steady growth of foreign owned debt.

That is a debt total of over $12,400,000,000,000.00 - 12.4 Trillion Dollars. That is $12.4 Trillion dollars of wealth accumulated not by you, your family or grandchildren, but by foreigners, and that was in 2007. It has grown since!

Would we have a mortgage crisis if those trillions of dollars had been paid to Americans instead of foreigners?

Year after year, both the Republican and Democratic parties and their leadership have maintained policies that steadily move wealth to foreign countries - then act surprised when we have a crisis caused by the mounting debt.

Is this what you vote for on election day?

Whether the answer is yes or no, it is what you have been getting for the last few decades from BOTH the Republicans and Democrats.

With all of the talk and rhetoric about "National Security" how do you as a citizen feel about foreign countries steadily increasing their financial influence over our country? Do you pay taxes so that leading Democrats and Republicans can squander your grandchildren's future for campaign contributions?

Oh how the Doubting Thomases will rant and rave at that factual statement. But don't take our word for it, listen to the US Controller General in 2007!

Foreign interests have more control over the US economy than Americans, leaving the country in a state that is financially imprudent. More and more of our debt is held by foreign countries – some of which are our allies and some are not. The huge holdings of American government debt by countries such as China and Saudi Arabia could leave a powerful financial weapon in the hands of countries that may be hostile to US corporate and diplomatic interests."

David Walker, the US comptroller general. 23 July 2007.  http://business.timesonline.co.uk/tol/business/markets/united_states/article2120735.ece

Just for the Doubting Thomases - lets look at the numbers, these are just FACTS.

The unacceptable and month by month of wealth outflow due to the trade deficit is allowing foreign countries and entities to buy increasing assets in our country. One of the most talked about measures of our country's debt are the US Treasury Bonds, commonly called the "National Debt."

Since 1986 the foreign owned portion of Treasury Bonds has grown from 15% to 46%. In dollar amounts it has grown from 0.2 Trillion USD to 2.4 Trillion USD.

Still a doubting Thomas?

I urge you to take some time and read the information on Grandfather Economic Reports

To quote from this report concerning the irresponsible accumulation of debt:

"Debt is like drugs - - one needs more and more and more to 'survive.' America, like a debt-junkie depending on support from others, is less and less in control of its own economic conditions looking forward - - becoming more and more dependent on the willingness of foreign interests to finance the destructive and escalating habit.

"If foreign interests have been financing this rising trend of our federal government debt, now at 46% of the total, from where will come the needed additional funds to finance the huge spending plans for entitlement programs, national defense, homeland security and out-dated infrastructure replacements in the future?"

The failure of American Corporations

At this point some will say, that stuff is about the same as your article every month. And they are sadly correct. Sound economic policies do not create economic crisis and our failed policies have not changed. So nothing changes and our country slides further and further down the slope of economic decline.

Let look at how the major recipients of the bailout funds (banks and financial institutions) continue to undermine the American Economy:

So now that you - as tax payers - own a chunk of many banks, how do you feel about your company continuing to use foreign H-1B visa workers to replace American workers?

For those of you who live in Georgia - are you aware that in 2006 our newly re-elected Senator, Saxby Chambliss, introduced legislation to let any corporation sell American jobs to foreign H-1B workers for a paltry sum of $500.00? Since he has years of legislative and voting history supporting increased or unlimited H-1B visas, do you think that he is going to change?

The system is broken! Only you the citizens can fix it and continuing to send the same folks back election after election has not worked. But by all means don't throw your vote or support away on anything other than a Republican or Democrat! After all, they have presided over our country's transition from the world's largest creditor nation to the world's largest debtor nation and are determined to solve all problems by spending more money!

I am just a redneck from the Georgia mountains. But continuing these economic policies makes about as much sense as a screen door on a submarine! Quite frankly the Democratic rectangular screen door aint going to work any better than the Republican square screen door!

Are you going to stay on board that submarine for the test dive?

This is not the Republicans' country. This is not the Democrats' country. This is not the Southern Partys' country. It is your country, it will be your childrens' and grandchildrens' country.

Your country is run by the 492,000 elected officials that YOU elect. If you want better economic policies you are going to have to elect people who will represent you and not represent special interests. Or you will just continue getting more of the same.

Consider helping us give the People a Real Choice. We desperately need your help, if you want us to continue to do our best to spread the message about these failed policies and their growing impact on your future generations. No contribution is too small and can be sent to:

Southern Party of Georgia
725 Ridgeview Road
Morganton, Georgia 30560

We would also appreciate your help in passing this information on to others who should be concerned.

Email This page

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

About the author:

Mike Crane, the 2nd vice chairman of the Southern Party of Georgia was a candidate for the 51st Senate District in Georgia. Despite gathering over 7,000 petition signatures in 2004 and 2006 combined - he was denied ballot access both elections.  While 70% of the Georgia State House districts and 56% of Georgia Senate districts had one candidate in November, Georgia tax dollars were used to prevent political competition.