{"id":388,"date":"2013-01-15T17:56:16","date_gmt":"2013-01-16T01:56:16","guid":{"rendered":"http:\/\/savingusmanufacturing.com\/blog\/?p=388"},"modified":"2013-01-15T17:56:16","modified_gmt":"2013-01-16T01:56:16","slug":"congress-hasnt-averted-the-real-fiscal-cliff-2","status":"publish","type":"post","link":"https:\/\/savingusmanufacturing.com\/blog\/national-security\/congress-hasnt-averted-the-real-fiscal-cliff-2\/","title":{"rendered":"Congress Hasn’t Averted the Real Fiscal Cliff"},"content":{"rendered":"

The \u201ckick the can\u201d legislation that passed in the wee hours of January 1st<\/sup> didn\u2019t address the real economic issues threatening a fiscal cliff for the United States ? the massive trade deficit and the rapidly escalating national debt. This article will show how these two economic issues are interrelated.<\/p>\n

The trade deficit grew from a low of $91 million in 1969 to a peak of $698.3 billion in 2008, dropping down to$379 billion in 2009 due to the worldwide recession before climbing back up to $559.8 billion in 2011. Final figures for 2012 are not available yet, but the trade deficit through the first 11 months of 2012 is running at an annual rate of $546.6 billion. \"\"<\/a><\/p>\n

Our trade deficit with China grew from only $6 million in 1985 to a high of $295.4 billion in 2011, after it had dropped down to $226.8 billion in 2009 during the recession. China\u2019s portion of America\u2019s trade deficit has nearly tripled ? from 22 percent in 2000 to 60 percent in 2009 and 52.7 percent in 2011. In the 11 years since China joined the WTO, the U.S. trade deficit with China has grown by 330 percent<\/strong>.<\/p>\n

The national debt has grown from $5.6 trillion in 2000 to $16.4 trillion<\/strong> on January 12th<\/sup>. As of July 2012, $5.3 trillion<\/a> or approximately 48% of the debt held by the public was owned by foreign investors, the largest of which were China and Japan at just over $1.1 trillion each.<\/p>\n

\u201cThe estimated population of the United States is 314,243,893 <\/strong>so each citizen’s share of this debt is $52,304.77<\/strong><\/a>. The National Debt has continued to increase an average of $3.84 billion per day<\/strong> since September 28, 2007!\u201d<\/p>\n

\"\"<\/a><\/p>\n

As you can see, the debt accelerated after the economic collapse in the fall of 2008 and has continued to accelerate since because of the recession<\/a>, automatic increases in unemployment benefits, food stamps, and social security payments for early retirement, as well as stimulus spending. The all-time record of increasing the debt by $1.1 trillion was set by President Bush in 100 days between July 30 and Nov 9, 2008 to avert the economic collapse of major banks and Wall Street companies. \u201cRecessions cut tax revenues\u2014in this case, dramatically, which accounts for nearly half of the deficit.\u201d<\/p>\n

<\/strong>According to Tom Donohue<\/a>, head of the U.S. Chamber of Commerce, the nation\u2019s largest business lobbying group, \u201cThe single biggest threat to our economic future \u2026 is our exploding national debt, driven by runaway deficit spending, changing demographics and unsustainable entitlements,\u201d he said in his annual \u201cState of American Business\u201d address.<\/p>\n

The reason why our massive trade deficit and escalating national debt are interrelated is that they share a common factor:\u00a0 the American manufacturing industry and the jobs it generates or the jobs it has lost.<\/p>\n

According to the Information Technology and Innovation Foundation report<\/a>, the U. S lost 5.7 million manufacturing jobs in the decade of 2000 to 2010, more than the total number of manufacturing jobs than the rate of loss in the Great Depression (33.1 % vs. 30.9%). Manufacturing jobs now only make up 9% of the American workforce, down from about 14% in 2000. Two million manufacturing jobs were lost in the Great Recession, adding to the 3.7 million we had already lost. Less than 10% have returned since the end of the recession. The report concludes:<\/p>\n