Thursday, February 12, 2009

Passing the buck to Uncle Sam

It is up President Obama to take the lead in opposing the worldwide spread of “protectionism.” Otherwise, says the Economist in its February 7 issue, “America and the rest of the world are in deep trouble.”

The Economist advises the United States to show “forbearance” when foreigners benefit from the multibillion-dollar U.S. stimulus package. Any “Buy American” requirement “would send a disastrous signal to the rest of the world” that would rekindle economic nationalism.


What’s wrong about giving the troubled American steel industry the first shot at orders for rebuilding American bridges and American school buildings? Why must the U.S. government show “forbearance” if Communist China wins the business with low bids from its government-built, government owned, and government subsidized steel mills?

Oh, but we dassn’t start a trade war. Well, here’s some hot news. Communist China, for one, has long waged a de facto trade war with the United States. And guess who’s won ?

Last year the United States imported $337,789,000,000 worth of goods and services from China -– almost five times more than we exported to China. Year after year, our trade deficit with China balloons further. It quadrupled over the past decade. thanks to our “forbearance.”

The lesson to other countries? Our non-China global trade deficit is astronomical. In 2008, not counting China, the United States imported $411,000,000,000 more in goods and services than we exported despite the global slowdown.

As a nation, we are consuming far more than we produce. Economists have long warned that this disparity could not last, and it can’t. The United States needs to produce more. The shock of the crisis may be the opportune time to begin.

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