Monday, February 14, 2005

Trade gap threatening economic future of America 

Lou Dobbs has this right:

"The ballooning trade deficit is also dragging down economic growth. Rising imports and falling exports in the latest quarter combined to shave more than 1.7 percentage points off the gross domestic product, according to the Bureau of Economic Analysis.

The trade deficit hindered economic growth in 13 of the 16 quarters in the president's first term in office, and in four of those quarters, the deficit cut more than a full point off growth.

This administration is not alone, though: The trade gap has dragged down annual GDP growth in every year but one since 1992.

Our swelling trade deficit with China alone reached a record high of $148 billion through the first 11 months of 2004, already a 30 percent increase over 2003's record gap with another month to be reported.

And while this has mostly led to lower prices for consumers, increased and unbalanced trade with China has resulted in the loss of 1.5 million American factory jobs over the past 15 years, according to the Economic Policy Institute. The job losses have accelerated as the trade deficit with China has grown.

"The American consumer is also the American worker," Republican Sen. Lindsey Graham of South Carolina told me, "and if we don't do something to protect our manufacturing base here at home, it is going to be hard to buy any retail goods."

We've lost more than 2.5 million manufacturing jobs since the beginning of 2001, and not surprisingly, our annual trade deficit has risen by nearly 70 percent over that time. At this rate, we can expect our trade gap to grow to $1 trillion within just the next few years.

This trend will only increase as we continue to outsource American jobs and import low-priced goods from countries with which we willingly enter into free trade agreements.

The so-called crisis in Social Security is the top priority of the president's domestic agenda, but that problem may be decades away from inflicting any pain on Americans.

Our nation's trade deficit, however, represents nearly 6 percent of our nation's GDP, and historically that will lead to tough choices: Either we must make a change in policy now or there will be a difficult adjustment on the part of markets, which can lead to an economic future none of us want to experience.

Talk about a crisis we need to solve immediately."