Protectionism and Nationalism are not dirty words. They represent our best chance of revitalizing the faltering American econony.
Examiner # 4 – The reason for lost jobs, wages and economic decline
The 787 billion dollar stimulus program is a flop. Only God knows what happened to the bundle of cash because few of these dollars have impacted the United States economy. Sure, just about every working American got $400 and every Social Security retiree received $250—an amount sufficient to pay the average gasoline bill for one month. And yes, some local and state civil servants were not fired because of a government grant. And if you look closely around your community, you might find a road or bridge project that is made possible because of the stimulus. But, by and large, the problem of soaring unemployment, declining wages and a weak economy continues to plague communities around the country. The current talk around Washington is the need for a second stimulus package. As always, the government’s solution to difficult issues is to throw money at the problem. Unfortunately, few politicians understand the United States has been entrapped in an economic quagmire since 1976.
1975 is a significant date in the story of the decline of American industry. It was the last year the United States enjoyed a trade surplus. Since then, our country has run a 34 year losing streak of trade deficits amounting to a net drag on our economy in the amount of 7.52 trillion dollars. During this same period (1976 to 2010), the National Debt increased by 11.7 trillion dollars. The point is that in spite of the 11.7 trillion dollar federal stimulus, the economy has continued to diminish at a progressing rate leading up to our present catastrophe. We all witnessed the results of our faulty financial policy -closed factories, lost jobs, the decimation of the middle class and a decline in the standard of living all happening while foreign countries morphed from third world countries to first rate competitors. So what’s happening? It’s as if we are sowing our own seeds of destruction!
An economist named Keynes said government spending was a critical part of economic policy. He said the multiplier effect of government spending would increase economic activity. The multiplier concept goes like this. The government pays a contractor for new roads, who then pays a grader operator, who then pays a grocer, who then pays a mechanic, who then buys a television, etc. It all works fine as long as the money stays in our economy. Herein lays the heart of our problem. Instead of investing the national debt in the US economy, our leaders with our implied acceptance and co-operation, have permitted 7.2 trillion dollars to go directly to foreign countries for clothing, footwear, electronics, cars furniture, steel, and a plethora of other products. The multiplier effect of government spending has gone to foreign countries along with our industries, factories and jobs. The irony of this contorted system is that as we buy foreign goods, we continue to reduce our industrial capability and simultaneously increase our reliance on foreigners for our subsistence. No amount of money can restore the economy given this self-destructing formula.
The answer is simple! America must begin producing for her own needs or suffer the inevitable consequences of dependency, decline and the loss of national sovereignty.