Debt, Trade & BRICS
Millions of lost jobs, near $1 trillion trade deficit, vanishing industries. Federal debt at $34 trillion & projected deficit of $1.9 trillion (yes, trillion). Interest payments soon reaching $1 trillion/year. Now we face threat from the BRICS bloc (Brazil, Russia, India, China, South Africa) trying to ruin our economy by ending the dollar as currency reserve. Here is a plan addressing our economic vulnerability.
The BRICS Threat
BRICS is a grave threat little known to many. If the dollar ceases to be currency reserve, our economy would collapse like a popped balloon: the dollar would crash and we would face massive inflation and soaring borrowing costs funding our reckless $34 trillion debt (and growing). BRICS is an existential threat seeking our economic ruin. We need urgent action: a united effort by our trade partners – the European Union, Canada, Mexico, Australia, South Korea, Japan – to strengthen our economic ties and block efforts by our main adversary, China, so that China fails in its attempt to destabilize our economies… and democracy itself.
Debt Threat
The federal government has accumulated enormous debt, now at $34 trillion. Trillion It rose nearly 14 trillion since 2020, the result of fiscal irresponsibility, throwing trillions at Covid, borrowing trillions to fund wars, and refusal to raise taxes to pay down debt in good economic times. Whatever happened to Keynesian economics?
We fund costly wars and military and social programs. Well… where does the money come from? By borrowing trillions more dollars. It will lead to disaster.
We need to wake up and start paying down debt. Democrats cannot endlessly fund well-intentioned social programs by borrowing trillions to cover it. Republicans need to recognize that taxes cannot endlessly be campaign slogans and cut despite massive debt growth. And this doesn’t even get to coming fiscal crises that will be faced in several years by reeling Social Security and Medicaid/Medicare funds.
Foolishness of Washington in refusing to manage expenses cannot continue. The worst case scenario will be the devaluation of the dollar and massive inflation (you think 10% was bad, wait…). We can avoid dystopian scenarios if we act responsibly over the next 10 years. Start by ending the need to borrow ever more and more.
Tariffs
We support significantly raising tarrifs to both improve domestic manufacturing and pay down debt. Let’s truly deal with the extraordinary amount of unfair trade practices by China and other countries that use government manipulation and other tactics to lower export prices so much that it destroys American manufacturer’s ability to compete.
The only way to fight unfair trade practices is to raise tariffs high enough so that we level the playing field. And isn’t that what the World Trade Organization was about all along? WTO seems to have lost its purpose and we allowed it, thus requiring us to take matters into our own hands.
All tariff revenues - all – must be used to either help domestic industries compete or pay down debt and deficits. This must not be negotiable. I propose requiring this by law.
Below are nine important proposals to strengthen our economic future and overcome outsourcing.
1. Level the playing field. Penalize abusive foreign labor practices. Require countries to raise salaries and labor benefits in return for the privilege of selling products in our country and most favorable trade status.
2. Official Trade Policy. If you treat workers miserably, we will not buy your products. It’s ethical. It’s good trade policy. Ethics matter!
3. Punish Trade Cheating. Require violating countries (and complicit American corporations) to raise labor standards: a 5-10 year transition period with yearly incremental improvements. Offending countries must agree to a phase-in plan and reach full compliance over an agreed upon period.
4. Inflation. One reason for recent inflation is that we rely on imports. It makes us vulnerable. It brings price increases as products are shipped in costly vessels at the whim of oceanic companies based in other countries, sailing up to 15,000-mile journeys. It brought port bottlenecks with dozens of ships waiting to dock and unload. It brought domestic transportation complexities fueling inflation. Were we not so dependent on imports, we may have avoided much of the inflation scourge. Let’s change that!
5. Low Wages. A key motivation for outsourcing is low foreign labor costs - workers paid miserably and given minimal health or retirement benefits. Companies make lots of money participating in such abuse. The result was trade deficits and the ruinous loss of American industries. This must change. A smart mix of better trade agreements, tax incentives, tariffs, and punitive fines will take us far.
6. Most Favored Status. In return for most favored trade status and access to American markets, countries must abide by predetermined standards else tariffs will be increased annually to such a point that a violating country’s heavily taxed products will be too expensive to sell in America. Following these steps over time will end huge trade deficits, pervasive outsourcing, job loss, and our supply chain being so vulnerable to foreign countries. It will take patience.
8. Polluting. Outsourcing also lowers costs because many countries are pathetically lenient about pollution. That’s cheating when it comes to free trade. Polluting water or sky is a shameful way to cut costs. Coal and other filth put in the air by China and others eventually ends up in American lungs from LA to New York. Trade agreements must include environment. It is a moral imperative.
Outsourcing and its legacy of vanished industries brought widespread anger… bitter politics… mounting menace from China. We need action. Free trade advocates and Wall Street may resist tariffs, but if we don’t stop unfair trade practices and labor abuse, we will never level the playing field. The dark path of decline is not acceptable... unless we want China to lead the economy of the future.