Running Chinese Trade Deficits

The U.S. trade deficit is a bigger threat to the domestic economy

than either the federal budget deficit or consumer debt

and could lead to "political turmoil".

Running Chinese Trade Deficits

Just look at the U.S. trade deficit and track the evaporation of your standard of living in one extended exhale of life’s breath. Reported by the Economic Policy Institute, the U.S. Department of Commerce reported that the international deficit in goods and services trade reached a record level of $726 billion in 2005, an 18% increase over 2004. The growth of the trade deficit with China, which reached $202 billion in 2005, was responsible for the entire increase in the United States’ non-oil trade deficit. Factor out the enormous cost of waging a contracted garrison presence in the Middle East and the subsequent increase in the cost of oil from regional market disruptions and you are left with a trade crisis that threatens the very economic independence of the American economy.

As most sophisticated observers of the world economy understand, the very mention of maintaining economic independence for a domestic economy is international sacrilege. The macro theorists eagerly look to impose micro management on national economics in the name of Free Trade. Their notion of free means conformity to global trade rules is applied to some and ignored by others. Lest one misconstrue that it is simply an enforcement issue, the basic error in the Free Trade model is that sovereign countries resist formulas that have major disruptions and disadvantages to domestic economies. The one great example of a country ignoring their national self-interest is the United States.

China has no such problem. Their hierarchical authority structure serves their commerce needs well. Reaching rapprochements among transnational State/Capitalists is natural when deals are made among similar authoritarians. While Chinese generals exploit their peasants, globetrotting masters of the universe extort their host countries. And what impact does such unnatural non-national transactions have on the United States? EPI concludes: “The rapid growth of imports and the loss of U.S. shares of world export markets, especially since 2000, have damaged the competitiveness of U.S. producers. The rising trade deficit in manufacturing has opened an ever-wider wedge between U.S. production and the nation’s purchases of manufactured goods.”

That assessment is a fact, only the drumbeaters for Free Trade will explain away the domestic consequences of vanished American jobs as a healthy economy. To add insult to injury the economist, Chen Wenjing, urged the United States to give up its "Cold War" attitude toward China. "It's known to all that the United States curbs exports and selectively sells only Boeing aircraft, soybeans and cotton to China, and that is also discriminatory as it doesn't apply the same policy to other countries," he told Reuters. "The United States needs to abandon its discriminatory policy and give up its Cold War mentality by removing the restrictions on high-tech exports to China," he said, referring to a ban intended to deny technology to the Chinese military.

So from the horse’s mouth you get the certainty that the Wall Street traders are always seeking. Sell China any high tech advancement to pay for all that discounted mass merchandise that clogs up the landfills. A formula to cook Chinese egg soup that will leave you hungrier every time. Bamboo shoots don’t build a healthy community, but the charlatans of WTO commerce want you to believe you will be dining on steak! The American public is a slow learner but they are not even that dumb. So why do all the politicians fall in line and take their marching orders that are determined to destroy a self-sufficient national economy? How will learning to speak Spanish help in a world where Asia will be selling every incidental must less essential product needed to sustain a civilized life?

Track your wealth being transferred overseas

But it gets worse! More from the EPI: “The U.S. also had a $44 billion trade deficit in “advanced technology products” (ATP) in 2005, an increase of 20% since 2004. The United States has had a deficit in ATP products since 2002, and the balance in this sector has fallen steadily since 1997, when the United States had a surplus of $33 billion in these sectors. Imports of high-tech goods from China were responsible for the entire U.S. deficit in ATPs.”

You know things are desperate when the New York Times gives print to protectionism. “In the Senate, Charles Schumer, Democrat of New York, and Lindsey Graham, Republican of South Carolina, have proposed imposing a 27.5 percent tariff on Chinese goods until Beijing allows its currency to float more freely against the dollar.” Though the lack of confidence in the dollar has an affect, the fundamental reason that the greenback is doomed is the ‘triplet treason treatment’.

1. Debt created central banking used to control the velocity of exchange while ignoring the quality of the medium.

2. Free Trade treaties that fraudulently promise prosperity, while stripping the economy of the domestic capacity to make, produce or employ citizens to meet the domestic needs of the country.

3. The axis of corruption willing to sell out our true national interest for access to international power and global influence.

Tariffs are the solution to cripple China’s insatiable voracity to super power dominance. America’s blindness to the very real Chinese ascendancy goes well beyond economic credits from U.S. debits. The trade deficit is real money gone forever and will need to be earned back if it ever returns.

The summary and warning offered by the EPI is so obvious that only a deliberate liar could deny the empirical reality. “The U.S. trade deficit poses great risks for the economy. The U.S. must borrow abroad to finance its trade deficits. The recent decline in the dollar indicates that private foreign lenders are less willing to supply new credit. Foreign governments stepped into the gap and financed a growing share of U.S. international debt in recent years. A rapid, uncontrolled decline in the dollar could destabilize U.S. financial markets and sharply increase interest rates and inflation. Foreign governments, primarily in Asia, have provided a substantial share of the net capital inflows in recent years.”

The United States used to be a pragmatic country with common sense citizens. Today, America is occupied by a “Ship of Fools”. Investors are so confused that they peddle worthless pieces of paper as they sail around the globe looking for a rainbow that was always back in their own land. Putting your fellow neighbor out of work for the promise of foreign returns on capital is suicidal. Fantasy utopian trade leads to a very real version of dystopia deprivation, oppression and state terror.

Depriving China of the technical means and the financial muscle to bury our society seems the sensible national interest. Is this a country of individuals or has it become a stable of beasts of burden. Paying for a ridiculous trade deficit to build up China is part of the plan to bankrupt this country. Free Trade backers are “Fifth Column” subversives. Turn off the spigot, end the debt and stop the bleeding. China may be a fake friend to corporate boards, but is a foe to our own best interests.

U.S. trade representative, Rob Portman issued a report that would establish a chief counsel for China trade enforcement to lead a task force to ensure better compliance by China with rules of the World Trade Organization. If this is the best that can be done by our government to reign in this predatory tiger, then we better form a better domestic government. The WTO has proven its destructive policies. Long ago was the time for rational protection, now is the juncture for national survival. Correct our priorities and put an end to trade deficits. That’s how you restore prosperity and put America back to work at living wage employment. The future is now, before your country goes broke . . .

SARTRE - February 20, 2006

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America's largest trade deficit is with China, a nation that enjoys Permanent Normal Trade Relations with the U.S. and ties its currency to the dollar to make it a more competitive trading partner.
Jo Ann Emerson

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