We have become a debtor nation
Thank you Charles Firth (Sept. 14) -- you were very close on a number of points related to our purchase of off-shore made products.
Many Americans have jobs related to the distribution of these products -- trucking, warehousing, sales, etc. Your view was often used years ago to comfort citizens who were out of work as a result of the many imported products available to us.
However, the real picture has changed drastically. One huge negative. When U.S. companies offshore their production for U.S. markets, the consequences for the U.S. economy are highly detrimental.
By turning U.S. brand names into imports, off-shoring has a double whammy on the U.S. trade deficit. The U.S. now has a trade deficit with every part of the world. In 2006 (latest annual data), the U.S. had a trade deficit totaling $838,271,000,000. Of that, China is holding $233, 087,000,000 of our debt.
What does it mean that the U.S. has a $800 billion trade deficit? It means that Americans are consuming $800 billion more than they are producing! How do we pay for that? We are giving up ownership of existing assets -- stocks, bonds, companies, real estate, etc. America used to be a creditor nation. Today we are a debtor nation. Today, foreigners own $2.5 trillion more of American assets than Americans own of foreign assets.
How long can Americans consume more than they produce? As long as we continue to find ways to go deeper into personal debt.
According to Forbes magazine, the top 20 earners among private equity and hedge fund managers are earning an average yearly compensation of $657,500,000 with four actually earning more than $1 billion annually. The otherwise excessive $36,400,000 average annual pay of the 20 top earners among CEOs of publicly held companies looks paltry by comparison.
We have been tricked into building a kingdom for those few. Are you ready to live as a serf? Sorry -- we are already there! We have willingly done more damage to ourselves than any terrorist group could possibly!
Ron Petrucci
St. Charles