Posts Tagged NAFTA

55 Reasons Why You Should Buy Products That Are Made In America This Holiday Season

(Michael Snyder)  This is the time of the year when Americans run out to their favorite retail stores and fill up their shopping carts with lots of cheap plastic crap made by workers in foreign countries where it is legal to pay slave labor wages.  By doing this, the American people are actively participating in the destruction of the U.S. economy.

You see, buying products that are made in America is not just a matter of national pride.  It is a matter of national survival.  If we do not support American workers, they are going to continue to see their jobs shipped out of the country.  If we do not support American businesses, they are going to continue to die off at a staggering rate.

Last year, the United States had a trade deficit with the rest of the world of 558 billion dollars.  More than half a trillion dollars that could have gone into the pockets of U.S. workers and U.S. businesses went overseas instead.  If that money had stayed in the country, taxes would have been paid on that mountain of cash and our local, state and federal government debt problems would not be as severe.

As a result of our massive trade imbalance, we have lost tens of thousands of businesses, millions of jobs and trillions of dollars of national wealth.  Both major political parties have sold us out on these issues, and we are getting poorer as a nation with each passing day.  We desperately need a resurgence of economic patriotism in the United States before it is too late.

Yes, I know that it is very tempting to buy foreign-made products.  After all, they are almost always cheaper.

But most people don’t often think about why they are cheaper.

Unfortunately, in the name of “free trade” American workers have been merged into a global labor pool where they have to compete directly for jobs with workers on the other side of the globe that live in countries where it is legal to pay slave labor wages.  This makes employing American workers a tremendous liability.

If a company hires you and pays you 10 to 15 dollars an hour with benefits, how is it going to compete with another company that pays workers a dollar an hour with no benefits on the other side of the planet?

Both major political parties are pushing this emerging “one world economic system“, but it is absolutely killing American jobs.  We have already seen a mass exodus of jobs and businesses out of this country, and wages for the jobs that remain in the United States are being forced down because there are hordes of unemployed workers that are willing to take just about any decent job they can find.

It has become painfully obvious that our politicians are not going to do anything to help us on these issues, so what we need is a mass awakening among the American people.

We need to educate people that buying things that are made in America is good for the economy and that buying things that are made elsewhere is bad for the economy.

But for now, most Americans are clueless.  They will line up on Black Friday morning and trample one another in a desperate attempt to save a few bucks on cheap plastic devices that were made on the other side of the planet.

And they will pay for much of this “shopping” with credit cards.

Credit card debt is on the rise once again.  In fact, average credit card debt per borrower was 4.9 percent higher in the third quarter of 2012 than it was in the third quarter of 2011.  It looks like most of us didn’t learn our lessons from the last financial crisis.

But not all Americans enjoy the shopping that is typically involved with this time of the year.  One recent survey found that approximately 45 percent of all Americans think that there is so much financial pressure associated with the holidays that they wouldn’t mind skipping them completely.

That same poll found that approximately 41 percent of all Americans would only be able to survive for two weeks without a paycheck.  Many Americans are up to their eyeballs in debt, their incomes are not keeping up with rising prices, and they find themselves scratching and clawing just to make it from month to month.

 Meanwhile, we continue to destroy our own jobs and businesses by spending our money on products that have been made outside the country.

The following are 55 reasons why you should buy products that are made in America this holiday season…

1. When you buy products that are made in America you support American workers.

2. When you buy products that are made in America you support companies that are doing business in America.

3. In 2000, there were more than 17 million Americans working in manufacturing, but now there are less than 12 million.

4. The United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.

5. Our trade deficit with China in 2011 was $295.5 billion.  That was the largest trade deficit that one country has had with another country in the history of the planet.

6. In 2011, our trade deficit with China was 28 times larger than it was back in 1990 and more than 49,000 times larger than it was back in 1985.

7. When NAFTA was passed in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.  In 2010, we had a trade deficit with Mexico of 61.6 billion dollars.

8. One professor has estimated that cutting the U.S. trade deficit in half would create 5 million more jobs in the United States.

9. Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the globe since 1975.  That 8 trillion dollars could have gone to support U.S. businesses and pay the wages of U.S. workers.  Federal, state and local taxes would also have been paid on that 8 trillion dollars if it had stayed in the United States.

10. According to the Economic Policy Institute, America is losing half a million jobs to China every single year.

11. The United States has lost an average of approximately 50,000 manufacturing jobs a month since China joined the World Trade Organization in 2001.

12. According to U.S. Representative Betty Sutton, the United States has lost an average of 15 manufacturing facilities a day over the last 10 years.

13. During 2010 alone, an average of 23 manufacturing facilities permanently shut down in the United States every single day.

14. Overall, the United States has lost more than 56,000 manufacturing facilities since 2001.

15. The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

16. Between December 2000 and December 2010, 38 percent of the manufacturing jobs in Ohio were lost, 42 percent of the manufacturing jobs in North Carolina were lost and 48 percent of the manufacturing jobs in Michigan were lost.

17. As I have written about previously, 95 percent of the jobs lost during the last recession were middle class jobs.

18. Due in part to the globalization of the labor pool, only about 24 percent of all jobs in the United States are “good jobs” at this point.

19. Right now, more than 41 percent of all working age Americans do not have a job, and the vast majority of the new jobs that are being created are low paying jobs.

20. The United States now has 10 percent fewer ”middle class jobs” than it did just ten years ago.

21. According to the Economic Policy Institute, the U.S. economy loses approximately 9,000 jobs for every $1 billion of goods that are imported from overseas.

22. As our economic infrastructure is gutted, formerly great manufacturing cities all over America are being transformed into festering hellholes.

23. Between 2001 and 2007, the value of products that Wal-Mart imported from China grew from $9 billion to $27 billion.

24. In 2001, American consumers spent 102 billion dollars on products made in China.  In 2011, American consumers spent 399 billion dollars on products made in China.

25. The United States spends about 4 dollars on goods and services from China for every one dollar that China spends on goods and services from the United States.

26. Back in 1998, the United States had 25 percent of the world’s high-tech export market and China had just 10 percent. Today, China’s high-tech exports are more than twice the size of U.S. high-tech exports.

27. In 2002, the United States had a trade deficit in “advanced technology products” of $16 billion with the rest of the world.  In 2010, that number skyrocketed to $82 billion.

28. The United States has lost more than a quarter of all of its high-tech manufacturing jobs over the past ten years.

29. Manufacturing employment in the U.S. computer industry was actually lower in 2010 than it was in 1975.

30. The Chinese undervalue their currency by about 40 percent in order to gain a critical advantage over foreign competitors.  This means that many Chinese companies are able to absolutely thrive while their competition in the United States goes out of business.

31. According to the New York Times, a Jeep Grand Cherokee that costs $27,490 in the United States costs about $85,000 in China thanks to all the tariffs.

32. In 2010, China produced more than twice as many automobiles as the United States did.

33. Since the auto industry bailout, approximately 70 percent of all GM vehicles have been built outside the United States.

34. Do you remember when the United States was the dominant manufacturer of automobiles and trucks on the globe?  Well, in 2010 the U.S. ran a trade deficit in automobiles, trucks and parts of $110 billion.

35. In 2010, South Korea exported 12 times as many automobiles, trucks and parts to us as we exported to them.

36. In 2010, China produced 627 million metric tons of steel.  The United States only produced 80 million metric tons of steel.

37. In 2010, China produced 7.3 million metric tons of cotton.  The United States only produced 3.4 million metric tons of cotton.

38. Today, China produces nearly twice as much beer as the United States does.

39. 85 percent of all artificial Christmas trees are made in China.

40. Right now, China is producing more than three times as much coal as the United States does.

41. China is now the number one supplier of components that are critical to the operation of U.S. defense systems.  How stupid can we possibly be?

42. According to author Clyde Prestowitz, China’s number one export to the U.S. is computer equipment.  According to an article in U.S. News & World Report, during 2010 the number one U.S. export to China was “scrap and trash”.

43. All over the United States, road and bridge projects are being outsourced to Chinese firms.  Just check out the following excerptfrom a recent ABC News article….

In New York there is a $400 million renovation project on the Alexander Hamilton Bridge.

In California, there is a $7.2 billion project to rebuild the Bay Bridge connecting San Francisco and Oakland.

In Alaska, there is a proposal for a $190 million bridge project.

These projects sound like steps in the right direction, but much of the work is going to Chinese government-owned firms.

“When we subsidize jobs in China, we’re not creating any wealth in the United States,” said Scott Paul, executive director for the Alliance for American Manufacturing.

44. The new World Trade Center tower is going to include glass that has been imported from China.

45. The new Martin Luther King memorial on the National Mall was made in China.

46. The Chinese economy has grown 7 times faster than the U.S. economy has over the past decade.

47. The Chinese economy is projected to be larger than the U.S. economy by 2016.

48. One economist is projecting that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

49. In recent years the U.S. economy has embraced “free trade” and the emerging one world economy like never before.  Instead of increasing the number of jobs in our economy, it has resulted in the worst stretch of job creation in the United States in modern history….

If any single number captures the state of the American economy over the last decade, it is zero. That was the net gain in jobs between 1999 and 2009—nada, nil, zip. By painful contrast, from the 1940s through the 1990s, recessions came and went, but no decade ended without at least a 20 percent increase in the number of jobs.

50. If you gathered together all of the workers that are “officially” unemployed in the United States today, they would constitute the 68th largest country in the world.

51. China now holds approximately more than a trillion dollars of U.S. government debt.  If you were alive back when Jesus was born and you had spent a million dollars every single day since then, you still would not have spent that much money by now.

52. Jeffrey Immelt, the head of Barack Obama’s highly touted “Jobs Council”, has shipped tens of thousands of good jobs out of the United States.

53. Without enough good jobs, more Americans than ever before are falling into poverty.  Today, more than 100 million Americans are enrolled in at least one welfare program run by the federal government.

54. According to Professor Alan Blinder of Princeton University, 40 million more U.S. jobs could be sent offshore over the next two decades if current trends continue.

55. If U.S. consumers do not start supporting U.S. workers and U.S. businesses, eventually we will all be so poor that very few of us will be able to afford to buy any gifts during the holiday season.

 

 

 

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UNSUSTAINABLE

When it comes to explaining the problems with our economy, one of the hardest things to do is to get people to understand that we are living in an economic fantasy world that is completely and totally unsustainable.  As a nation we consume far more than we produce, we spend far more than we bring in, our debt is growing much faster than our GDP is, our entitlement programs are growing at an exponential rate, our retirement system is a Ponzi scheme and the Federal Reserve is printing money as if there is no tomorrow in a desperate attempt to paper over all of our problems.  But we have all grown so accustomed to the debt-fueled prosperity that we have been enjoying for so many decades that it actually feels “real” to most of us.  Unfortunately, history has shown us that it is simply not possible to grow your debt faster than your economy indefinitely.  At some point your consumption will drop back to a level more equal to your production.    Sometimes that adjustment can be gradual, but other times it can be extremely painful.  In our case, we have been living way above our means for so long that it would take a major economic miracle just to keep our adjustment to an “exceedingly painful” level.  We are living in the largest debt-fueled prosperity bubble in the history of the world, and our unsustainable economy is going to crash and burn at some point.  Hopefully it will be later rather than sooner, but a crash is most definitely coming.

The following are some of the reasons why the bubble economy that we are living in right now is unsustainable….

The Trade Deficit

Most Americans do not really understand what a “trade deficit” is, but it is at the very core of our economic problems.

Basically, we buy far more stuff from the rest of the world than they buy from us.  We send them huge piles of our money, and they send us oil that we burn in our cars and cheap plastic products that we end up throwing away.  We keep doing this month after month after month, and this is systematically making us poorer as a nation.

In 2012, it is being projected that our trade deficit will fall somewhere between 500 billion and 600 billion dollars.

At this point, the United States has a trade imbalance that is more than 7 times larger than any other nation on earth has.

Overall, the United States has run a trade deficit of more than 8 trillion dollars with the rest of the world since 1975.

Instead of going out of the country, those 8 trillion dollars could have gone to U.S. businesses and U.S. workers.  In turn, taxes would have been paid on those 8 trillion dollars and our debt problems would not be nearly as dramatic today.

But we didn’t do that.

We chose to allow tens of thousands of businesses, millions of jobs and trillions of dollars of our national wealth to leave the country.

Stupid move, eh?

But both political parties have been endlessly pushing the “free trade” agenda.  They have both promised that it would bring us tremendous prosperity.

Well, just take a look at our formerly great manufacturing cities today.  Do they look prosperous to you?

It turns out that Ross Perot was right when he warned about the “giant sucking sound” that would happen if NAFTA was implemented.

When NAFTA was pushed through Congress in 1993, the United States had a trade surplus with Mexico of 1.6 billion dollars.  By 2010, we had a trade deficit with Mexico of 61.6 billion dollars.

That didn’t work out so well, did it?

What about opening up trade with China?

Back in 1985, our trade deficit with China was approximately 6 million dollars (million with a little “m”) for the entire year.

In 2011, our trade deficit with China was 295.4 billion dollars.  That was the largest trade deficit that one nation has had with another nation in the history of the world.

Our trade with China is tremendously unbalanced.  Today, U.S. consumers spend approximately 4 dollars on goods and services from China for every one dollar that Chinese consumers spend on goods and services from the United States.

This is a huge reason why shiny new factories are going up all over China, and our blue collar cities are turning into rotting war zones filled with unemployed people.

If you can believe it, the United States has actually lost more than 56,000 manufacturing facilities since 2001.

Until we fix the trade deficit we are going to continue bleeding factories, jobs and national wealth at an astounding pace.

The National Debt

It is being projected that U.S. GDP will grow at a rate of about 2.2 percent this year.

The problem is that our federal budget deficit will be somewhere around 7 percent of GDP this year.

With each passing day we are losing ground.  No other nation on earth has been able to run up debt like this indefinitely, and neither will we.

Does this chart look like a healthy situation to you?….

Sadly, all of this government debt is just about the only thing holding up our economy at this point.  Since Barack Obama has been in the White House, the U.S. national debt has increased by about 5.5 trillion dollars.  Of course the Obama administration has spent a lot of that money on incredibly stupid stuff, but it still gets into the pockets of average Americans that in turn spend it on food, gas, mortgage payments, etc.

If we could go back in time and suck that 5.5 trillion dollars of extra spending out of the economy we would be in a horrible economic depression right now.

But that does not mean that borrowing and spending all of that money was the right thing to do.  We have stolen it from our children and our grandchildren and we are going to stick them with the bill.

That is highly immoral and it is a national disgrace.

Yet we continue to do it because we can’t help ourselves.  We are ruining the future of this nation in order to make the present more pleasant for ourselves.

As I noted yesterday, the U.S. national debt jumped more on the very first day of fiscal year 2013 than it did from 1776 to 1941 combined.

We are completely addicted to debt and we can’t stop.  We know that we are destroying the future of the United States but we have absolutely no self-discipline.

By the end of Barack Obama’s first term, the U.S. government will have accumulated more debt during those four years than it did from the time that George Washington took office to the time that George W. Bush took office.

But most Americans seem fine with that.

Most Americans don’t even really know why this is happening, and most don’t really seem too concerned about finding out.  They just want the good times to continue to roll.

Sadly, the truth is that our financial system is designed to create government debt.  It is one of the primary purposes of the Federal Reserve system.

At this point, the U.S. national debt is more than 5000 times larger than it was when the Federal Reserve was first created.

So I guess you could say that the Federal Reserve is doing a good job of what it was designed to do.

And until we change the system things are going to continue to get worse until the entire system collapses.

Boston University economist Laurence Kotlikoff is warning that we are basically facing financial armageddon if something is not done.  Kotlikoff speaks of a “fiscal gap” which he defines as “the present value difference between projected future spending and revenue”.  His calculations have led him to the conclusion that the United States is facing a fiscal gap of 222 trillion dollars in the years ahead.

Where in the world are we going to get an extra 222 trillion dollars?

Entitlements

Every society needs a safety net, but we are rapidly getting to the point where there are going to be more Americans on the safety net than there are Americans supporting it.

Back in 1983, less than 30 percent of all Americans lived in a home where at least one person received financial assistance from the federal government.

Today, that number is up to an all-time record of 49 percent.

Many people don’t believe me when I tell them that more than 100 million Americans are enrolled in at least one welfare program run by the federal government right now, and that does not even count Social Security or Medicare.

But it is actually true.

Overall, there are nearly 80 different “means-tested welfare programs” that the federal government is currently running.

But of course the biggest financial burdens are Medicaid, Medicare and Social Security.  All three are on course to become completely and totally unsustainable.

For example, the number of Americans on Medicaid soared from 34 million in 2000 to 54 million in 2011, and it is being projected that Obamacare will add 16 million more Americans to the Medicaid rolls.

Ouch.

Well, what about Medicare?

Sadly, Medicare is even more frightening.

As I wrote recently, it is being projected that the number of Americans on Medicare will grow from 50.7 million in 2012 to 73.2 million in 2025.

How in the world can we afford that?

At this point, Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years.  That comes to approximately $328,404 for each and every household in the United States.

Are you ready to contribute your share?

Social Security is in really bad shape as well.

At the moment, approximately 56 million Americans are collecting Social Security benefits.

By 2035, that number is projected to soar to a whopping 91 million.

Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.

Where are we going to get that money?

Total Debt

Of course the national debt is not out only debt problem.  All over the country there are state and local governments that are on the verge of insolvency.  Corporations and financial institutions are leveraged like crazy.  And of course consumers have absolutely gorged on debt over the past several decades.

As a result, we are drowning in debt from sea to shining sea.

The good news is that our GDP is more than 12 times larger than it was 40 years ago.

The bad news is that the total amount of debt in our country is more than 30 times larger than it was 40 years ago….

Obviously this is something that cannot go on forever.

We simply cannot keep accumulating debt much faster than our economy is growing.

Nobody knows exactly when the “adjustment” is coming, but it most definitely will arrive at some point.

Money Printing

The Federal Reserve has attempted to monetize many of our economic problems by printing gigantic mountains of money in recent years.

The Federal Reserve is at the very heart of our economic problems, but most Americans don’t realize this.  It was the Federal Reserve that created the conditions for the housing bubble, and it was the Federal Reserve that badly mismanaged the response when that bubble burst.  The Federal Reserve decides how much money will be printed and what our interest rates will be.  The Federal Reserve lends out trillions of dollars to the banks that they like, and other banks they let die.  The Federal Reserve picks winners and losers in our economy, and most of the time that means good things for the big Wall Street banks and bad things for the rest of us.

In a desperate attempt to keep our unsustainable financial system from collapsing, the Federal Reserve has decided to start printing unprecedented amounts of money.  Just look at what this has done to the monetary base….

And QE3 really hasn’t even started to kick in yet.

So how bad will that chart look after QE3 has been adding another 40 billion dollars a month to the financial system for a while?

You know, the Weimar Republic was absolutely convinced that they were doing the right thing by printing lots of money too.

But in the end that didn’t work out very well for them at all….

So should we really be celebrating the fact that the Federal Reserve is going down the same path that the Weimar Republic did?

Demonocracy has released a great new graphic that does a wonderful job of illustrating just how huge the amounts of money involved in QE3 are going to be.  If you have not seen it yet, you can view the graphic right here.

The rest of the world is watching the games that we are playing with our currency.  Right now we think that we are getting away with it, but what we are doing is not sustainable.  At some point the rest of the world will totally lose confidence in the U.S. dollar, and when that happens the U.S. dollar could easily lose its status as the primary reserve currency of the world.

If that were to happen the coming shift in our standard of living would happen much more rapidly.

Please share this article with as many people as you can.  We need to wake people up and get them to understand how incredibly vulnerable our financial system really is.  We are on a path that is unsustainable any way that you want to look at it, and if something dramatic is not done our economy is going to experience an unprecedented collapse.

So what happens if nothing is done and everything crashes all around us?

Well, I hope that you are prepared because it isn’t going to be pretty.

http://theeconomiccollapseblog.com/archives/unsustainable

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