Politics & Philosophy by Dr. Martin D. Hash, Esq.
For the past decade, the U.S. has been running a three-quarters of a $trillion Trade Deficit, the largest trade imbalance of any nation by far, over $10 trillion so far just this century, but “Free” Trade advocates insist this is not inherently a problem. They claim that in a fast-growing economy, trade provides the needed jump in productivity required to prevent inflation, and a rising tide lifts all boats. Unfortunately, the economy in the U.S. has fluctuated between robust and anemic during the same period without much of a change in the Trade Deficit. Also, they say high interest rates make our goods more expensive, inciting imports, but the U.S. has had low interest rates the entire 21st Century, so continued insistence that the mounting debt is harmless are not reassuring. It's not just imports; when American companies set up shop in China, Vietnam, Mexico, etc., they are using $. Add to that all the $ sent home by immigrants, legal and otherwise.
The causes of a Trade Deficit include the strength of the currency, and since the dollar is the world's Reserve currency, it's the safe haven for countries looking for someplace to keep their money. Included in that is all their surplus trade dollars coming back, which creates financial and market bubbles as other countries look for things to invest in the U.S.: property, stocks, bonds, Treasuries, and derivatives; a form of financial colonization. This also raises the specter of other, possibly hostile, nations having the leverage to crash the U.S. economic system, unless of course, the U.S. government never intends to pay off its debt, in which case, Americans got all those foreign made products for free. If that happens, the Trade Deficit can actually be viewed as tribute from the World for the U.S. being so awesome.
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