Friday, August 5, 2011

Basic facts remain the same

The stock market downturn of August 2011 does not change basic facts. 

In the United States, there are 15 million people unemployed.   This number is being thrown around by many people.   I don't think anyone knows the correct number.  Take 15 million as an estimate.

President Obama often speaks about new industries creating new jobs.  These ideas are good but the associated job creation rate would be microscopic in relation to an estimated 15 million people waiting for jobs.

A news reader on a major TV network recently said "no one knows how to create jobs". 

This statement by the news reader is not correct.  There is a way to create jobs in America on a mass scale.  The only problem is that censorship is in effect and no one is allowed to mention this job creation method.

Censorship is not in effect in this blog!  I freely mention the only mass job creation method available, and that is "bring our manufacturing jobs back from China and other countries that don't buy from us in approximately equal amounts". 

President Obama mentioned this method himself during the election campaign.  He mentioned it once and then his 300 advisors and the people behind the scenes who really control things jumped on him and told him never to say this again.

So that is where things stand today.

All the  hysterics by politicians concerning the debt limit were beside the point.  What all the politicians should really get hysterical about is pushing the censorship out of the way so that we can start the process of getting our manufacturing jobs back from overseas.

We need a strong president to lead this process.  We need a strong president to put tariffs or foreign goods sales tax on imports from China and other countries that don't buy from us.  Once this measure is put in place, manufacturing employment in America will increase.

The politicians are hysterical about debt and deficits.  As the level of manufacturing activity increases, with the assistance of tariff or foreign goods sales tax, tax revenue from Americans employed in America will increase, helping to reduce the deficit problem. 

Some people say that "Bring the jobs back from China" is simplistic, stupid, impractical, pie-in-the sky, childish, or whatever other names you want to apply.  I say, yes, there are some challenges.  But what alternate mass job creation strategies are available?

I say the alternate job creation strategies consist of nothing more than waiting and hoping that somehow something will happen to create jobs and reduce unemployment.  

Here are some basic facts in support of my comments above::

+  In a 50-year spree 1961 to 2011 we very stupidly sent and allowed to be sent millions of our manufacturing jobs to foreign countries.   Censorship presently in effect in America does not allow this simple factual statement to be made.  But if we are not allowed to make this statement, we will not understand the cause of our economic and debt problems, and we will never be able to solve the problems. 

+  The loss of millions of manufacturing jobs has severely damaged our economy and the only way to repair the damage is to get those jobs back.

+  We are in exploitive and completely UNFAIR "trade" relationships with China and some other foreign countries.  We have every justification to tear up the paperwork and get out of these relationships.

+  Our negative balance of trade in manufactured goods with all foreign countries is over 500 billion dollars per year.  This is real physical money pouring out of our country.  When our country is heavily in debt and when 15 million people are unemployed, is it helpful to be sending a net 500 billion dollars out of our country every year?  This hemorrhage of wealth out of our country is another topic that the censorship does not allow us to mention. 

Suppose we put an immediate tariff of 25% on our net importing of goods (over 500 billion dollars per year).  That would provide new revenue to the government of over 125 billion dollars per year. 

Suppose the tariff encourages domestic manufacturing and within a couple of years 10 million people are back at work, each paying $3000 per year income tax.  That would be 30 billion dollars per year in tax revenue, plus the saving in welfare costs. 

The factories employing the people would also pay tax. 

Add up new tax paid by workers, reduced welfare costs, revenue from tariff or foreign sales tax, revenue from new factory operations, and you have additional tax revenue on the order of 200 billion dollars per year. 

Then there is the value-added effect of the increased manufacturing activity, and the increased confidence and optimism in America, and the economy really starts to take off.  

The American people are forthright, go-ahead, inventive, people, and we can take action and get our manufacturing jobs back from overseas. 

We can tell China and other countries exploiting us to go jump in the lake.  These countries are our enemies, not our friends.

If we don't take these strong and forthright steps, we are doomed to huge permanent unemployment and resulting social unrest, continuing impossibly high deficits, and total breakdown of the American economy.

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