It's the Free Trade, Stupid (Good Read)

Posted: 8/10/11 10:05 PM ET

One point seems largely to have been missed in recent weeks, amid all the excitement over the Federal budget and the sovereign-debt crises in Europe: free trade is largely the root cause of all these problems. So let's trace the causation for a minute.

Start with the Federal budget. Federal revenues are derived from the underlying economy, and therefore, if the underlying economy were larger, revenues would be, too -- even without any tax increases. As a result, anything that causes the U.S. economy to be smaller, tends to widen any gap between taxes and revenues.

Enter free trade.

For it is thanks to America's embrace of free trade (whether genuinely free or not; that's another issue) that we have been running giant trade deficits for years. And these have been costing us economic growth.

More: http://www.huffingtonpost.com/ian-fletcher/its-the-free-trade-stupid_b_924003.html

it other world economies. Has gutted out manufacturing base.
OMG we do not even mfg our own bullets. Hope we never get
into war with China. I can see it now....will you sell us
some equipment so we can fight you. Gutted our Middle Class
with the outsourcing of Jobs. A country that does not make
things will eventually fail.

Do Not Let ANYONE say we are Isolationists. Germany participates
in Trade but also protected her country and her people. Managed
Trade Policy so as to keep certain mfg in that country. You
can have trade and look out for your own county's interests.

This is a must read. The link between our trade deficit and our excessive debt is made very clear in this article.

It also explains why China loans us so much money.

The whole article is wonderful but I especially liked this explanation:

Over the past 35 years or so that we have been running trade deficits, we have mostly paid for this by assuming debt, and especially in recent years, a huge part of that debt has been public debt. One consequence has been that in order to manipulate the dollar price of its currency downward and boost exports, China has been buying huge amounts of U.S. Treasury securities. Thus the same mechanism that caused our trade deficits also increased our governmental debt.

If the United States had enforced balanced trade (i.e. no trade deficit) during this period, China would not have bothered manipulating its currency, as it would not thereby have been able to obtain a trade surplus with the U.S. Therefore it would not have accumulated its present huge holdings of U.S. debt and we would not be so indebted today.

http://www.huffingtonpost.com/ian-fletcher/its-the-free-trade-stupid_b_924003.html

To this day, American corporations do not have access to Chinese consumer markets, and when we do, we have to pay a tarriff. Goods and services are imported from China, duty-free, because it lowers the cost of labor.

If you cannot sell you labor, then what value do you have?

...to avoid Human Rights, LABOR Rights, and Environmental Protections,
and gain access to Slave Labor in 3rd World countries.

It has worked PERFECTLY as designed.
They used Smooth Talking Politicians to SELL their scam to a gullible America.

I can NOT believe that anyone is STILL pushing this old scam with a straight face.


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