Loss of Manufacturing is the Federal Government’s Fault

Anne Marie Cox of Catholic News Service (CNS) reported on the president during his recent campaign swing through four states. On September 29th President Barack Obama visited a Mid-West family in a Des Moines, Iowa neighborhood and spoke to a group assembled in backyard lawn chairs. The local parish priest, Father Michael Amadeo of the Holy Trinity School, was the last one to pose a question. The priest shared a story about a parishioner. Apparently the 55-year-old father had lost his manufacturing job over one year ago and the family was struggling. The priest asked what the president’s economic policies would do in the next year to help people in that circumstance. If anyone were looking for hope, however, they might as well have phoned a call center in India.

President Obama responded that many of the manufacturing jobs simply will not return, because modern factories are so efficient and require fewer workers. Moreover, some jobs are moving overseas where wages are cheaper. His concluding advice was for the unemployed man to keep his skills honed and to be ready when the economy finally turns around again. The president plugged clean energy as a promising business alternative and then left. Not only was the president less than empathetic to the priest’s question or the plight of unemployed man, his administration has got its economics all wrong and government policies are sure to drag this recession all the way to Kingdom Come.

The following analysis is taken from Tom Pauken’s excellent book, Bringing America Home (2010). In it he details those policies behind our nation’s marked economic decline. A central reason for huge trade deficits and the shift of economic power from Main Street to Wall Street is a business tax system that gives private-equity moguls incentives to take imprudent risks with the companies they control. In this respect, they have a distinct advantage over owners of U.S. companies who would like to run their businesses in a tried and true conservative fashion or pursue capital accumulation-based strategies, but find that our tax structure “disincentivizes” them. The United States has a corporate income-tax rate of 35 percent. That rate is an economic incentive for financiers to load a company up with high levels of corporate debt in order to avoid taxation. It is a no-brainer—you can write off debt on your taxes, but savings and investments get taxed heavily. No rational businessman would want his company to accumulate significant savings if the interest on those savings is taxed at 35 percent.

American businesses that have their plants and employees in the United States also do not operate on a level playing field with our trading partners or competitors. Every major trading country in the world except for the United States provides a tax advantage for domestic manufacturers. Even as other countries have removed tariffs over the past four decades, they have been careful to put into place value-added taxes or VATs that provide their companies with a significant economic advantage over foreign businesses. Austin business economist David Hartman has developed data on the effects of a border-adjusted VAT. Starting with France in the mid-1960s, European countries began adopting border-adjusted VATs that now average 19 percent. All Organization for Economic Co-operation and Development (OECD) countries, made up of over 30 developed countries—all except the United States, that is—have since adopted VATs or their equivalents averaging 18 percent. As a result, U.S. goods carry the full burden of federal, state, and local taxes, plus an added tax averaging 18 percent when they are shipped to foreign markets. To make matters worse, foreign goods that are shipped into the United States enjoy an 18-percent VAT abatement—yet are subject to none of the taxes imposed on U.S. manufacturers.

It really is small wonder that so many big companies have moved their manufacturing outside the United States. It is more of a wonder why the rest haven’t gone! The hollowing out of our manufacturing base and the resultant unemployment and regrettable socio-economic inequalities that have been produced, were predictable. They were caused by the federal government’s regressive tax and trade policies. The president shows every indication of perpetuating the same policies of what Doug Ingram has called a design for “exporting prosperity.” In the past ten years the United States has lost one-third of its manufacturing jobs. Obama did not start the problem, but Obama’s deficits after less than two years in office already exceed President George W. Bush’s after eight years. Unemployment is stuck at nearly ten percent and is likely to remain there for two more years. The Democrat Congress, for the first time in recent memory has not even passed a part of the proposed budget out of committee for the fiscal year that already began. In other words, the president honestly can’t give much hope to the priest in reply to his question. Either the president doesn’t know what to do in the next year, or else his intent is for more of the same that got us in this mess in the first place.

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Wesley Allen Riddle is a retired military officer with degrees and honors from West Point and Oxford. Widely published in the academic and opinion press, he ran for U.S. Congress (TX-District 31) in the 2004 Republican Primary and is currently Chairman of the Central Texas Tea Party.

Is America In Decline? 24 Statistics About The United States Economy That Are Almost Too Embarrassing To Admit


The Economic Collapse
Oct 13, 2010

Does anyone really want to hear that America is in decline? For decades, most of us have been raised to believe that the United States is “number one” and that anyone who doubts that fact is a “gloom and doomer” that should just pack up and move to “Russia” or “Iraq” or some other country where things are not nearly as good. But does it do us or future generations any good to ignore the very serious signs of trouble that are erupting all around us? The truth is that it is about time to wake up and admit how much trouble we are actually in. The U.S. government is absolutely drowning in debt. The entire society is absolutely drowning in debt. We are being slaughtered in the arena of world trade, and every single month tens of billions of dollars (along with large numbers of factories and jobs) leave our shores for good. Our infrastructure is failing, our kids are less educated and our incomes are going down. We have serious, serious problems. At one time, the U.S. economy was so dominant that it was not even worth talking about who was in second place. That is no longer the case in 2010. Our forefathers handed us the greatest economic machine in history and we have allowed it to fall apart right in front of our eyes. A national economic crisis of historic proportions is getting worse with each passing month, and yet most of our leaders seem to be asleep at the switch.

So is American in decline? Well, read the statistics below and decide for yourself. The reality is that when you start connecting the dots it gets really hard to deny what is going on.

Urgent action must be taken if things are going to be turned around. It is time to get our heads out of the sand. It is not guaranteed that the United States will always be the greatest economy in the world or that we will even continue to be prosperous.

For many Americans, it will be incredibly difficult to admit that our nation has become a debt addict and an economic punching bag for the rest of the world.

But if we are never willing to admit what the problems are, how are we ever going to come up with the solutions?

What you are about to read below is going to absolutely shock many of you. But hopefully it will shock you enough to get you to take action. We desperately need to change course as a nation.

The following are 24 statistics about the United States economy that are almost too embarrassing to admit….

#1 Ten years ago, the United States was ranked number one in average wealth per adult. In 2010, the United States has fallen to seventh.

#2 The United States once had the highest proportion of young adults with post-secondary degrees in the world. Today, the U.S. has fallen to 12th.

#3 In the 2009 “prosperity index” published by the Legatum Institute, the United States was ranked as just the ninth most prosperous country in the world. That was down five places from 2008.

#4 In 2001, the United States ranked fourth in the world in per capita broadband Internet use. Today it ranks 15th.

#5 The economy of India is projected to become larger than the U.S. economy by the year 2050.

#6 One prominent economist now says that the Chinese economy will be three times larger than the U.S. economy by the year 2040.

#7 According to a new study conducted by Thompson Reuters, China could become the global leader in patent filings by next year.

#8 The United States has lost approximately 42,400 factories since 2001. Approximately 75 percent of those factories employed at least 500 workers while they were still in operation.

#9 The United States has lost a staggering 32 percent of its manufacturing jobs since the year 2000.

#10 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#11 In 1959, manufacturing represented 28 percent of all U.S. economic output. In 2008, it represented only 11.5 percent.

#12 The television manufacturing industry began in the United States. So how many televisions are manufactured in the United States today? According to Princeton University economist Alan S. Blinder, the grand total is zero.

#13 As of the end of 2009, less than 12 million Americans worked in manufacturing. The last time that less than 12 million Americans were employed in manufacturing was in 1941.

#14 Back in 1980, the United States imported approximately 37 percent of the oil that we use. Now we import nearly 60 percent of the oil that we use.

#15 The U.S. trade deficit is running about 40 or 50 billion dollars a month in 2010. That means that by the end of the year approximately half a trillion dollars (or more) will have left the United States for good.

#16 Between 2000 and 2009, America’s trade deficit with China increased nearly 300 percent.

#17 Today, the United States spends approximately $3.90 on Chinese goods for every $1 that China spends on goods from the United States.

#18 According to a new study conducted by the Economic Policy Institute, if the U.S. trade deficit with China continues to increase at its current rate, the U.S. economy will lose over half a million jobs this year alone.

#19 American 15-year-olds do not even rank in the top half of all advanced nations when it comes to math or science literacy.

#20 Median household income in the U.S. declined from $51,726 in 2008 to $50,221 in 2009. That was the second yearly decline in a row.

#21 The United States has the third worst poverty rate among the advanced nations tracked by the Organization for Economic Cooperation and Development.

#22 Since the Federal Reserve was created in 1913, the U.S. dollar has lost over 95 percent of its purchasing power.

#23 U.S. government spending as a percentage of GDP is now up to approximately 36 percent.

#24 The Congressional Budget Office is projecting that U.S. government public debt will hit 716 percent of GDP by the year 2080.

Please share these statistics with as many family members and friends as you can. It is time to get real. It is time to admit that we have some really big problems.

America is in decline and the situation is getting worse by the day. If we are not willing to admit how bad things really are, then we are never even going to have a chance to find the solutions that we need.

There will be no solution to the economic strip mining of America until those who wrote and enforce the government policies that made it possible are removed from power. It is all part of the ongoing "quiet war" against the American People that has arguably been waged by this nation's "elites" since 1787... most certainly since the Civil War.

200+ years of political domination and corruption must be forcibly uprooted before any revival of manufacturing can occur. Have to treat the root cause before anything else. One advantage the American political system has is it's federal-you have state and more realistically, local levels that can be taken over... sounds like what I've been talking about all along.

In any event, a revival of manufacturing in America? Actually it is not only possible, but more than likely will take on a more distribuited, egalitarian quality as 3d printing techniques and the availability of machine tooling surplused by the enemy's economic warfare against us is already available.

Two major hurdles are power generation and protection of said assets against seizure. Power generation: we will have to come up with our own means of doing so, as the electrical grid is monitored. Alternative fuels, ranging from biomass to geothermal to far wilder fringe theories about zero point energy and the works of Nikola Tesla must all be explored.

Defending said manufacturing from an enemy that runs the country will require political, social and yes, more direct measures. Controlling the political structure of your town and more desirably, county, can give your machine shop or hackerspace a legal shield... up to the point where the state or fedgov send in their thug cops... they're raiding organic growers and co-ops with guns drawn. They don't want you to be free and if you can make your own products and do it cheaper and with more quality than whatever's shipped from China, you're a threat.

So if you can give the orders to your local police then the threat of raids on your manufacturing come from the states and feds.

The president..., his administration has got its economics all wrong and government policies are sure to drag this recession all the way to Kingdom Come.

Nailed it!

I still say this all boils down to the treason Slick Willie perpetrated when he opened our economy up to our enemy communist China,which happened 10 years ago in October 2000.

Goes back even farther than that...

Remember NAFTA and GATT both promoted by Bush the 1st and the neocon fascists.

Friend that is so true.

Bush is the one who is responsible for NAFTA and GATT and Perot warned us all of what would happen, in his words a Great Sucking Sound of our Jobs Leaving the Country.

And NAFTA and GATT should be the first on our hit list of things that need to be eliminated to enable us to get our jobs back.

The things that will need to be done will not be easy and some will not be very nice but they will need to be done if the economy is to be restored.

If you look back into the history of this country it has had a steady path this way. The PWB (to use a common description) have been removing our ability to be self-sufficient for centuries.
The hills of NC and Cal and the rocky mountains still have gold that has never been tapped. However it seems it is "ECONOMICALLY" not feasible to mine it. Even at $1,267.00 per ounce?
The hills of Utah have millions on acres of hard coal which burns clean and thus that land has been taken by the Feds for parks.
It seems that this great 'UNSPOILED" land of America is destined to become a vast Park for the people who can appreciate it. That is after the rest of us vermin die off from poverty, vaccines, and eugenics.
The plan is in the numbers.
Like they posted on the Georgia guide-stones.
'the population of the Earth shall be 530,000,000."
The same is true for sub-Saharan Africa. There they have been killing them by the millions with armies, malaria (which is almost gone in the rest of the world),starvation, engineered grains rom the UN, and AIDS.
Both of these parks will be in high yield areas while people starve in the rest of the world.
Here they are flooding the land with foreign immigrants in hopes of creating ethnic wars that will do the job and give them reasons to send in Armies to clean the rest.
Problem is that this country was, and is, populated by the troublemakers and malcontents of a thousand strifes, wars, and revolutions.
We don't push well. We push back.
It seems that when they cut off one source of life for us we create another and go on as before believing in freedom, our creator "Yahweh", and worse yet passing these traits on to our kids despite their schools.