In March 2006 Nick Beams wrote a piece on the World Socialist Web Site headed “U.S. balance of payments deficit hits another record.”
The article show with great clarity that America was living beyond its means even in 2006. The U.S. economy imported goods and services at some 59% higher than exports,thus normal economic growth automatically increases the deficit.
The argument that the U.S. balance of payments deficit is not a cause for concern,because the income on U.S. owned overseas assets makes up for the deficit,is not valid. In 2006 foreign earnings on U.S. assets rose to $132.3 billion and income on overseas assets held by U.S. investors rose to $129.8 billion,this left a deficit of $2.4 billion on investment income. Since 2006 the position has become a lot worse as America’s trade position deteriorated. In 2006 foreign tenders were financing 80% of the increase in the federal budget deficit and nothing but a depression in America could reduce it.
In 2009 the depression has arrived with the help of former President Bill Clinton’s sub prime mortgages and as a result China is in trouble and also Australia of course.
You do not believe it? Then why did U.S. Secretary of State,Hillary Clinton beg the Chinese leadership to continue to buy worthless U.S. Treasury bonds and forgot all about Human Rights etc.,on her recent visit? (The Australian,23.2.09,p.12.)
What worries me is that China will pass on those worthless bonds to us in exchange for our resource companies like Rio Tinto.
Perhaps Clinton has already offered China a free hand in Australia and Taiwan,as long as China continues to buy American paper money.
America’s economy is 25% of the world’s economy and we all depend on it.
We are in a World depression and we will not come out of it until America and the West starts earning an income by manufacturing again and protecting their industries by trade barriers. Forget the Third World the darlings of our stupid ruling elite,they do nothing for us and America’s idea that we could live off their industries by our investment,is the sort of crap only our Academics could dream up.
The latest ploy of these @#*@#*# is to try and force us to pay for China’s CO2 emissions which were produced by manufacturing goods for us. Dieter Helm professor of economics at Oxford University said,“Focusing on consumption rather than production of emissions is the only intellectually and ethically sound solution. We’ve simply outsourced our production.”(The Guardian Weekly,27.02.09,p.5.)
I did not need an Oxford Don to tell me the obvious,so I will give him some free advice about a solution;
Europe and America must close all their third world factories and set up barriers against cheap imports and Oxford and all it’s Dons should be given to China!!!
