by James Glaser
December 15, 2004

Before I start writing this, I want you to know that I am not an economist, but I did balance my checkbook today... and it was in the black.

In the last month that we know about America's trade deficit set an all time record of 55.4 billion dollars. What has been touted by Washington is that in that same month we sold a record 98.1 billion dollars worth of our stuff to other countries. Much has been said about the 18 billion worth of US made industrial supplies sold overseas and that was a new record also. These two records are what Washington talked about.

What we didn't hear, was that after we sold that 98.1 billion worth of stuff, we bought, (another record) 153.5 billion from other countries and just to prove what a record setting month October was, we had a record $16.8 billion trade deficit with China.

Now for eight months in a row our trade deficit with China has grown larger. Many American companies have moved to China, so the corporations are still making money, it is just that they are doing it with Chinese labor instead of American labor. Remember those 1.5 million jobs that were lost in George's first term? Well China gained a lot of them.

At the start of the Iraq war, everyone was saying that it was a war for control of Iraq's oil. Well if it was, we lost that one. A big factor in our trade deficit was the price of oil. Back in October it hit $41.79 a barrel, which was over 11% higher than September and it has gone up since then so there are new records to be set.

The International Herald Tribune reports that the "Bush administration believes the best way to handle the mushrooming trade deficits is by getting other countries to remove trade barriers and open markets to US businesses."

The Democrats and unions argue that Bush's free-trade policies are not working and they are what cause American jobs to migrate overseas.

Alan Greenspan, the Federal Reserve Chairman, said in a speech last month that swollen trade deficits could threaten the economy by souring foreign appetites to invest in the United States.

Like I said, I am no expert, but I do know that these trade deficits have been going on for years and every month we send billions more overseas than we take in and I know that can't go on forever. We became the richest nation in the world, because for years the high payments came in to our country and our trading was on the plus side.

I can go into deficit spending for a couple of months by dipping into savings, and if it lasts longer than that, then I can get a loan from the bank to tide me over until things turn around, but our country has been getting those "Bank Loans" for years now and much of that money doesn't even come from our banks.

Our country owes so much money now, that we have to float loans all over the world and some day, the world could say, "Enough."

When you buy a Savings Bond you are loaning money to the government, but all the savings bonds that people hold only covers 3.3% of the debt, Foreign investors hold 22.7% of our debt, while Commercial Banks have 4.2%, Insurance companies 3.3 %, Pension Funds 6.5%, the Federal Reserve and Government accounts 40.6% and then there is the mutual funds, state and local governments, State Pension funds, and others.

When George Bush or those in Congress talk about cutting the deficit in half in four years, well that does nothing for our National debt, The National Debt is the money owed by the Government, while the "federal deficit" that George talks about is the yearly amount by which spending exceeds revenue. When George says he is reducing the deficit, all he is saying is that he will be adding less to the debt that year.

Right now our country owes, (that means we had to borrow this much because we spent more that we had) $7,572,184,624,588.32. That was on December 14th 2004 and it is going up by 2, 600,000,000.00 each and every day. Yes, we have to pay interest too.

Congress had this deal with itself that we couldn't let the debt go higher than 7.4 trillion dollars, but it seems that they got a new credit card, because they voted to raise that limit to 8.18 trillion on November 17th of this year.

So much for Republicans liking smaller government and fiscal restraint.

So what do I read today? George and his guys are going to Congress looking for an $80,000,000,000.00 check, that is 80 billion dollars or another way to say it, is that George wants eighty thousand bundles with a million dollars in each bundle, so he can keep his war going in Iraq for a few months more.

Of course we don't have that kind of money lying around, so we will have to float another loan to make sure that check does not bounce.

What it boils down to, if we keep on with trade deficits and we keep spending like George Bush has been doing, in no time at all, Congress will have to raise that debt ceiling again.

Now you have to know that all this money is going some place, and it is going to the people who backed George Bush and the Republicans. When Bill Clinton was in the money went to his friends and you know what? Some people are friends with both sides.

The only people who are going to get hurt in this whole scam is our children if they are young and for sure our grand children and their children, because no matter how great this scam seems right now, some day somebody is going to have to pay the piper. George and his friends won't, because they are rich and they will bail and head to some place like, maybe China. It seems that some of them have already done that and they are selling us "stuff" at record levels.