Wednesday, April 19, 2006
This week Chinese President Hu Jintao visits the United States. His visit marks the beginning of the “passing of the torch” from the current number one super power to the future number one super power. It’s no secret the United States is economically eroding while countries like China are gaining momentum. Experts predict in twenty years China will replace the United States as the number one economic power with the European Union being a close number two.
Primary causes of the US economic erosion:
1. The growing national debt will negatively impact the US economy because eventually you have to pay off that bill. The payoff will restrict the governments’ ability to compete with foreign governments; this is exactly what happened with the old Soviet Union. China heavily subsidizes its manufacturing companies so they can manufacture goods cheaper than the cost of the imported raw materials; no other country can compete with this. This practice allows them to KEEP manufacturing jobs NOT lose them to other countries.
2. The devaluation of the US dollar. To bail us out of the national debt, the government has already begun the process of printing more money. So now the US dollar will quickly become worthless in comparison to other currency. As a result, the Euro is quickly replacing the dollar as the investors’ choice.
3. The permanent loss of higher paying middle class jobs in manufacturing and infrastructure will create an overwhelming burden for the US government as salaries continue to stagnate or decline. This increases the dependency on social programs and lowers the amount of income taxes collected. This also decreases the purchasing power of a large segment of the population so the GDP will also fall. If illegal aliens are allowed citizenship they will continue to erode these wages even further as the final frontier of blue collar jobs in infrastructure will also be at risk. The time is close at hand when the only jobs in the US for high school graduates be minimum wage. Very soon you might need a college degree just to be a Wal-Mart greeter.
4. The shift of US manufacturing to China could be devastating in war time. If we are ever involved in another world war we will not have the domestic manufacturing to produce the materials needed to compete. During WW2, US factories were easily converted to produce war materials but with these factories now completely extinct, we will no longer be able to produce the materials necessary to be a world power. China could exploit this advantage to conquer the US in a one on one battle. Unlike the US government, the Chinese realize how important these jobs are for global dominance.
5. Greed. The cheap Chinese labor is enticing to corporate America as profits have never been better. Paying someone $.25 cents a day when it used to cost $12 an hour with full benefits is too good to be true. But the long term damage to the US status as a super power will be permanent.
Our leaders are only concerned with immediate economic returns and do not have the sight to predict the inevitability of their poor decisions. Corporate America is given free reign to make decisions that negatively impact the country. Instead of our government encouraging domestic manufacturing and domestic jobs, they are allowing the corporations to take a path which is leading to disaster.
What can the US government do to protect American interests while keeping relations strong with China and other countries? The government can eliminate all tax credits for corporations that manufacture overseas and only give tax breaks for companies that manufacture domestically. This one simple thing could save us but it will never happen because the US government is bought by corporate America.
When America got involved in WW2, FDR swore no millionaires would be created as he would not allow any one to profit from war so he fought to ensure companies would not profit from American blood. However, quite the opposite of FDR, our current administration sells American blood to the highest corporate bidder. All you have to do is look at the tax return for VP Dick Cheney to see how many millions he is earning through Halliburton contracts.
I love this country and I want us to remain the number one super power in the world. But the path we are on could lead us to disaster unless our leaders smarten up and start leading the country again. Will this happen? Only time will tell.
Primary causes of the US economic erosion:
1. The growing national debt will negatively impact the US economy because eventually you have to pay off that bill. The payoff will restrict the governments’ ability to compete with foreign governments; this is exactly what happened with the old Soviet Union. China heavily subsidizes its manufacturing companies so they can manufacture goods cheaper than the cost of the imported raw materials; no other country can compete with this. This practice allows them to KEEP manufacturing jobs NOT lose them to other countries.
2. The devaluation of the US dollar. To bail us out of the national debt, the government has already begun the process of printing more money. So now the US dollar will quickly become worthless in comparison to other currency. As a result, the Euro is quickly replacing the dollar as the investors’ choice.
3. The permanent loss of higher paying middle class jobs in manufacturing and infrastructure will create an overwhelming burden for the US government as salaries continue to stagnate or decline. This increases the dependency on social programs and lowers the amount of income taxes collected. This also decreases the purchasing power of a large segment of the population so the GDP will also fall. If illegal aliens are allowed citizenship they will continue to erode these wages even further as the final frontier of blue collar jobs in infrastructure will also be at risk. The time is close at hand when the only jobs in the US for high school graduates be minimum wage. Very soon you might need a college degree just to be a Wal-Mart greeter.
4. The shift of US manufacturing to China could be devastating in war time. If we are ever involved in another world war we will not have the domestic manufacturing to produce the materials needed to compete. During WW2, US factories were easily converted to produce war materials but with these factories now completely extinct, we will no longer be able to produce the materials necessary to be a world power. China could exploit this advantage to conquer the US in a one on one battle. Unlike the US government, the Chinese realize how important these jobs are for global dominance.
5. Greed. The cheap Chinese labor is enticing to corporate America as profits have never been better. Paying someone $.25 cents a day when it used to cost $12 an hour with full benefits is too good to be true. But the long term damage to the US status as a super power will be permanent.
Our leaders are only concerned with immediate economic returns and do not have the sight to predict the inevitability of their poor decisions. Corporate America is given free reign to make decisions that negatively impact the country. Instead of our government encouraging domestic manufacturing and domestic jobs, they are allowing the corporations to take a path which is leading to disaster.
What can the US government do to protect American interests while keeping relations strong with China and other countries? The government can eliminate all tax credits for corporations that manufacture overseas and only give tax breaks for companies that manufacture domestically. This one simple thing could save us but it will never happen because the US government is bought by corporate America.
When America got involved in WW2, FDR swore no millionaires would be created as he would not allow any one to profit from war so he fought to ensure companies would not profit from American blood. However, quite the opposite of FDR, our current administration sells American blood to the highest corporate bidder. All you have to do is look at the tax return for VP Dick Cheney to see how many millions he is earning through Halliburton contracts.
I love this country and I want us to remain the number one super power in the world. But the path we are on could lead us to disaster unless our leaders smarten up and start leading the country again. Will this happen? Only time will tell.
posted by DarthImmortal at 9:40 AM
2 Comments:
Mimi,
Proof that our politicians are against us in the fight is they award contracts to foreign companies instead of American companies. Do me a favor and check the label of one of your husbands uniforms. I have heard they are now made in China. Can you verify that for me?
Mimi,
I am glad to hear the uniforms are made in the US. I have had people tell me they checked and found a made in China, although I never verified this. Thanks for checking.
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