Tariffs for Survival or Profits for Multinationals
politics.com
Tariffs have always been the traditional method to protect our sovereignty as an independent nation. Arguments that America benefits from Free Trade, when it is not Fair, are the siren's calls of the a deceptive vamp. Just look at the record that Free Trade has inflicted on our economy and security. Our <http://www.digitaleconomist.com/bop_4020.html>Balance of Payments problem requires the financing of this deficit by foreign investment.
"The rise in the <http://www.epinet.org/webfeatures/econindicators/currentacctpict.html>current account deficit was led by a surge in the merchandise (goods) trade deficit, which rose to a historic high of $347.1 billion in 1999 more than $100 billion higher than its previous record of $246.9 billion in 1998. Measured as percentages of gross domestic product, the current account deficit was 3.7% and the goods trade deficit was 3.8%, exceeding the previous peaks set in 1987 of 3.4% for both indicators."
Hearing on "Risks of a Growing Balance of Payments Deficit"
senate.gov
Prepared Testimony of Mr. Paul Volcker
Former Chairman of the Board of Governors
Federal Reserve System
10:00 a.m., Wednesday, July 25, 2001 - Dirksen 538
What is in question is sustainability. Our trade and current account deficits are now trending toward $500 billion a year, or close to 5 per cent of our GDP. Those are very large amounts by any past standard for the United States. Given our weight in the world economy, we are absorbing a significant portion of other countries savings. With the low level of our personal savings, and now the prospect of diminishing Federal surpluses, this means we are dependent upon maintaining a strong inflow of foreign funds. We have also become accustomed to a ready supply of cheap goods from abroad. Both factors point to continuing large trade and current account deficits.
Here at home we have become less dependent on traditional "old economy" manufacturing industry, but there are limits to how far we can or should countenance further erosion in our manufacturing base. All this suggests that, over time, we must look toward a narrowing of the trade and current account deficit. |
