"Even the Rope...": The Facts
Today, and again tomorrow, and again each day thereafter, this nation must raise $2 billion from foreign creditors.
• In 2007, the United States' deficit in international trade in goods and services was $700.3 billion.
(U.S. Census Bureau. U.S. Trade in Goods and Services—Balance of Payments (BOP) Basis: Value in Millions of Dollars, 1960 thru 2007. Foreign Trade Division. June 10, 2008. )
Since 2000 we’ve lost one out of five manufacturing jobs.
• From September 2000 to September 2008, the United States has lost over 3.8 million manufacturing jobs—a decline of 22 percent. Alan Blinder, former vice chairman of the Federal Reserve during the Clinton administration, says as many as 40 million additional manufacturing jobs could be lost over the next two decades due to overseas outsourcing. the number of jobs at risk of being shipped out of the country over the next decade or two could reach 40 million.
(United States Department of Labor. “Employment, Hours, and Earnings from the Current Employment Statistics Survey (National).” Bureau of Labor Statistics. Data Compiled October 3, 2008. )
(Martin Crutsinger. “Factory Jobs: 3 Million Lost Since 2000.” Associated Press. April 20, 2008.)
For those that remain, wages and benefits actually declined over the last eight years—a record in futility.
• Since 2000, median household income has declined by 1 percent ($324), the number of workers with employer-provided health insurance has declined by 8 percent (almost 2 million workers) and the number of workers with employer-provided pension coverage declined by 2.8 percentage points from 2000 to 2006—to 42.8 percent—and 7.8 percentage points below the level in 1979.
(United States Census Bureau. Current Population Survey 2007. Table A-1: Households by Total Money Income, Race, and Hispanic Origin of Householder: 1967 to 2007 (Adjusted 2008 Dollars). Pg 31. August 2008. )
(Lawrence Mishel, Jared Bernstein, and Heidi Shierholz. The State of Working America 2008/2009. (Advance Proof). Economic Policy Institute. Pg 121. Ithaca, New York: Cornel University Press, 2008.)
We are now running a deficit with China in high technology goods.
• From 2002 to 2007, the U.S. high-tech trade deficit with China has increased 473 percent—$67.7 billion.
(Christian E. Weller and Holly Wheeler. "Our Nation’s Surprising Technology Trade Deficit: A Wide Array of High-Tech Imports Overtake U.S. Exports." Center for American Progress. March 2008.)
Mexico now exports 50 percent more cars to the U.S. than we export to the entire world.
America built itself into an economic powerhouse through balanced and fair trade. But with rigged trade policies for the last three decades, these deficits kept rising.
• Since 1977, the U.S. trade deficit has increased 651 percent, adjusted for 2007 dollars.
(United States Census Bureau. U.S. Trade in Goods and Services—Balance of Payments (BOP) Basis: Value in Millions of Dollars, 1960 thru 2007. Foreign Trade Division. June 10, 2008.)
Foreign central banks, sated with U.S. bonds, have set up sovereign investment funds to buy into strategic U.S. companies.
• Led by Japan, China, the United Kingdom and the oil exporting nations of OPEC, foreign governments now own more than $2 trillion in American debt. In 2007, the Chinese government created the China Investment Corp. to seek high returns on that foreign reserve nest egg. It invested $3 billion for a stake in the Blackstone Group and $5 billion in Morgan Stanley. Abu Dhabi bought $7.5 billion of Citigroup and Singapore paid $4.4 billion for a part of Merrill Lynch.
• Warren Buffett, one of the world's most successful investors, has launched his most withering attack to date on the U.S. trade deficit, describing Americans as "rich spending junkies" who could turn into a nation of "sharecroppers".
(Andrew Ross Sorkin, Ed. “Of Sovereign Funds and Prairie Fires. New York Times. February 21, 2008.)
(Paul Wiseman and Calum MacLeod. “China unlikely to rescue Wall Street.” USA Today. October 2, 2008.)
(Simon Bowers. “Buffet Attacks American Spending Junkies.” The Guardian. March 7, 2005.)
American business is steadily moving finance, technology, production, and marketing beyond our borders.
• Some 50 percent of all U.S.-owned manufacturing production is now located in foreign countries, and 25 percent of the profits of U.S. multinational corporations are generated overseas—and the shares are rapidly growing.
(Jeff Faux. Globalization that Works for Working Americans. Economic Policy Institute. Briefing Paper #179. 11 January 2007. )
It's time to forge a global strategy that works for working people.
First: Slash our trade deficit with a concerted drive for energy independence.
• Currently, petroleum based imports account for 50 percent of our trade deficit.
(United States Census Bureau. U.S. International Trade in Goods and Services: July 2008.
Foreign Trade Division. 11 September 2008. Pg 11.)
Second: Invest in life-long education and training and build the most modern and efficient infrastructure to increase our competitiveness.
Investment in Education
• Every dollar invested into the high quality pre-school programs yields a return of over seven dollars later.
(High/Scope Educational Research Foundation. Lifetime Effects: The
High/Scope Perry Preschool Study Through Age 40. 2005.)
(High/Scope Educational Research Foundation. Lifetime Effects: The High/Scope
Perry Preschool Study Through Age 40—Errata. 2005.)
• In 1979, Pell Grants covered 77 percent of the cost of college; now it only covers 32 percent. An investment of $51 billion would return the Pell Grant to its 1979 level and create more educational opportunities.
(United States Department of Education. “Table320: Average Undergraduate Tuition and Fees and Room and Board Rates Charged for Full-Time Students in Degree-Granting Institutions, by Type and Control of Institution: 1964-65 Through 2006-07.” National Center for Education Statistics. July 2007.)
(Jacqueline E. King. 2003 Status Report on the Pell Grant Program. American Council on Education and the Center for Policy Analysis. October 2003.)
(American Council on Education and the Center for Policy Analysis. Fact Sheet on Higher Education. November 2004.)
Investment in Infrastructure
• Investing $500 billion over ten years with the Apollo Alliance plan will create clean energy, good jobs and energy independence—projected to add over 5 million high-wage jobs.
(Apollo Alliance. The New Apollo Program: Clean Energy, Good Jobs. 2008.)
• Every $1 billion of federal funding invested in transportation infrastructure supports 47,500 jobs.
(Mary Peters, Administrator of Transportation Research Board. Remarks, Session On Transportation Reauthorization. Washington, D.C. January 13, 2003. )
• Every $1 invested in public transportation generates an average of $6 in economic returns.
(American Public Transportation Association. The World Economy is Moving. Can America Keep Up? March 2007.)
• Investing $20 billion in deferred school maintenance would generate 250,000 skilled maintenance jobs.
(Mary Filardo. Good Buildings, Better Schools: An Economic Stimulus Opportunity with Long-Term Benefits. Economic Policy Institute. Briefing Paper #216. 29 April 2008)
• Every $1 billion spent on improving our water infrastructure creates 57,400 jobs.
(Report: Massachusetts Drinking Water. May 2007. Volume 3. Number 1.)