2015 -- America is a competitive society. In sports, we now have "March
Madness" in basketball, and in politics, every governor is competing
to attract industry; build the state's economy. New York promises zero
taxes for 10 years for industry to locate.
Washington, the President and Congress refuse to compete in globalization;
have no policy of building or protecting the U.S. economy. One hundred
sixty countries compete in globalization with a Value Added Tax that's
rebated on exports. Our Corporate Tax is not rebated on exports.
a VAT stultifies competition; stultifies manufacturing in the United States.
An entrepreneur producing in the U.S. has to pay the 35 percent Corporate
Tax and a 17 percent VAT when his exports reach China. A competitor in
the U.S. can produce the same product in China, import it tax free into
the U.S. and put the entrepreneur out of business.
Wall Street, et al contributes to do nothing to compete with China. The President and Congress do nothing. Their cover is "Free Trade". As Henry Clay stated in 1836 about Free Trade: "It never existed It never will exist". The Founding Fathers pointed the way when Congress enacted the Tariff Act of 1787 - two years before The Constitution. Protectionism worked so well that Edmund Morris in Theodore Rex that after 100 years: "The United States was already so rich in goods and services that she was more self-sustaining than any industrial power in history."
when our deficit in the balance of trade was $1.3 billion, President Nixon
imposed a 10 percent surcharge on all imports. In 2014, our deficit in
the balance of trade was $505 billion. The economists attribute the loss
of 9,000 jobs for every $1 billion deficit in the balance of trade which
means we lost 4,545,000 jobs last year. In December 2006, the Princeton
economist Alan Blinder estimated that in the next ten years, the U.S.
would offshore 30-40 million jobs. We're losing 3-4 million jobs each
year from Corporate America offshoring the country's research, technology,
production, jobs and payrolls. This means that the country charging a
VAT is really charging a tariff and for imports, the U.S. is subsidizing.
The average VAT in Europe is 21 percent meaning Europe is charging a 21 percent tariff on imports and the U.S. is subsidizing exports to Europe 21 percent. In the Korean War in 1950, the United States came up short on defense supplies and President Truman had Congress enact the Defense Production Act so that we wouldn't have to wait on imports to defend our country. Now, we are begging Russia for helicopters for Afghanistan (Frontpage magazine, 4/8/13) and importing uniforms for our G.I.'s (The New York Times,12/20/13).
The Wall Street Journal reports on 3/24/15 that: "The U.S. imported a record $138 billion in car parts last year, equivalent to $12,135 of content in every American light vehicle built." Further it reports: "However the growth of parts imports has left the U.S. with a growing deficit in overall cars and parts - $168.3 billion last year compared with $156.2 billion in 2013." Not only are the President and Congress failing to compete, but the U.S. is going out of business. This nonsense has got to stop.
in globalization, the President and Congress must do the following:
Clinton and all in Washington nag about income inequality in the United
States. Income inequality is solved by competing in globalization
Senator Fritz Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of Making Government Work (University of South Carolina Press, 2008).
© 2014, Ernest F. Hollings. All rights reserved. Contact us for republication permission.
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