$725.8
Billion
Trade Gap Hits Record For 4th Year In a Row
The U.S. trade deficit soared to a record in 2005 for the
fourth year in a row, according to a government
report released February 10 that provided a reminder of the
dangers hovering over our economy.
The United States imported $725.8 billion more in goods and
services than it exported last year, the
Commerce Department said. That is up 17.5 percent from 2005,
and it is an all-time high not only in
dollar terms but as a proportion of the economy; the figure
is equal to 5.8 percent of gross domestic
product.
For December alone, the trade gap increased to $65.7 billion
from a revised $64.7 billion in November.
That is the third-highest monthly deficit ever.
The
gap worries many economists because it means the United States must borrow
heavily from
overseas (i.e., CHINA).
The dollars that Americans spend on imports are often invested by foreigners
in the bonds of the U.S.
Treasury and mortgage agencies such as Fannie Mae and Freddie Mac, so
the more the trade deficit
widens and the longer it persists, the greater U.S. indebtedness becomes.
That is why some analysts
fret about a scenario in which foreigners would sell off U.S. securities en
masse, causing interest
rates to soar and the global economy to
fall into recession.
"This trade deficit is unsustainable -- we cannot sit back as
other nations produce the world's goods
and we continue to lose family-supporting, middle class jobs," said
Richard L. Trumka, the secretary-
treasurer of the AFL-CIO.
Critics of the Bu$h administration's trade policies drew
special attention to the mounting U.S. deficit
with China, which rose 24.5 percent to $201.6 billion last
year, the biggest gap the United States has
ever posted with a single country.
"Particularly disturbing is the news that our trade deficit
with China is two and a half times bigger than
it was when we signed a trade agreement with them in 2000," said Sen.
Byron Dorgan (D-N.D.) in a
statement, referring to the accord allowing Beijing to join
the World Trade Organization. "That's pretty
compelling evidence something has to change."
In addition to their deficit
spending, the GOP removed over $156 billion from our nation’s
Social
Security Trust Fund. (General Accounting Office)
Keep America free from debt to foreign powers.
 VOTE DEMOCRATIC!
$1.2 trillion: With the
money going to the
Iraq
war, the
United States could
set up a universal health care system,
provide universal preschool, carry out the
recommendations of the 9/11 commission, double cancer research
funding, increase funding to Gulf Coast
reconstruction, and enact a "global immunization campaign to save
millions of children's lives."
U.S. Trade Deficit Reached Record $489.4
Billion in 2004
Bu$h Borrowing Money - Jeopardizing
Our Future - from China
The
United States trade deficit soared to a record of $489.4 billion in 2004,
according to a federal
report,
raising concerns about the problems such a large gap could create.
The
deficit, which is the difference between the value of foreign goods and services
purchased in
this
country and the amount of American
goods and services sold overseas, is now the largest in
history.
Despite a variety of reactions to some of the underlying patterns in the trade
report, concern about
the size of the deficit was almost uniform. "This is not only a record, it
is a record by a great deal,"
said Richard J.
DeKaser, an economist at National City Corporation.
"We
are developing a great reliance on foreign capital to pay for our debt," Mr.
DeKaser said,
"and
it is clear that foreigners are losing confidence, that there is a greater
reluctance to finance
our
trade deficit."
To finance its trade deficits, the United States has been borrowing record
amounts from
foreign investors and
banks, primarily from China. The risk is that foreign investors could
balk
at
continuing to lend the money needed just to finance that deficit. That has not
been a problem so
far
amid very low interest
rates.
The
International Monetary Fund warned in a report in 2005 that, given the
ballooning trade deficit,
the
United States risked a loss in foreign confidence and that a quick, uncontrolled
drop in the dollar
could
upset world
markets.
Alan
Greenspan, former Federal Reserve chairman, added his voice to these concerns.
He told the
House
Committee on Financial Services that "given the already substantial accumulation
of dollar-
denominated debt, foreign investors, both private and official, may become less
willing to absorb
ever-growing claims on U.S. residents."
Why doesn't Bu$h get
tough with China? How can he get tough with someone
who holds our debts?
| 
BERRIEN
COUNTY DEMOCRATIC PARTY