Oct 172012

Politics in America today is looking more and more like “Alice in Wonderland”. The government has lost it’s way and  its reason for being; because of this the government has become harmful to America instead of a source of guidance and wisdom for the nation.

It’s a well known fact (to the point that it’s getting boring) that the current President, Barack Obama, has made many mistakes and he is ignoring them; but these mistakes can not be ignored anymore because of the harm they have done to the nation. For example, his policies caused Americas credit rating to be downgraded for the first time in it’s history. This was a major disaster because it increased the cost of borrowing money; this really mattered because America is borrowing so much these days. But to Obama, it’s no big deal.

 When Obama took office, Americas debt was 10 trillion, Obama increased the debt to the insane level of 16 trillion. This is higher than the net worth of the nation, so we’re technically bankrupt. If this crazy spending continues so that the national debt reaches 120% or 130% of its GDP (gross domestic product) a financial collapse is a sure thing. If Obama has a second term and does not stop the irresponsible spending, then America will have that financial collapse in his second or third year, or sooner. The history of other nations proved this clearly when they created high debt levels.

Into this picture of irresponsible financial management by Obama, steps Mitt Romney, a man who has spent most of his life managing businesses in financial trouble and made many of them a successful business again. This is the definition of Mitt Romney. It’s who he is, a very successful financial manager.

But yet when the experienced financial manager, Mitt Romney,  is running for President against Barack Obama and his harmful policies, it’s a dead tie in the polls. At first this appears to be beyond reason, but if you look into this closer, reason starts to appear.

Since Mitt Romney is running as a Republican, he has to carry the baggage of the Republican Party. This baggage includes the fact that Republicans lied to the American people by saying that foreign trade with low wage countries  is good for America. But how can America win trading with a county like China where workers earn one dollar an hour, when American workers need at least ten dollars just to break even with the expense of living in America? Or to look at this another way, a product made in America that costs $100 to make, can be made for $15 dollars in some of the foreign countries America is trading with. This is a no win situation if ever there was one.

Treaties like:

NAFTA: North American Free Trade Agreement

WTO: World Trade Organization

Have caused a large reduction of the manufacturing facilities in America. Since America has been trading with these agreements, America has lost 7 million manufacturing jobs. Manufacturing used to be 22% of the GDP, now it’s just  11% of GDP. In some stores like Wal-Mart, 85% of the goods sold there are foreign made. Clearly, America can not compete against these countries without continuing this great harm to its manufacturing sector. 

If you go back in American history to around the year 1880, America traded with foreign countries, but these foreign goods coming into America paid a tariff of from 30% to 50% in order to protect the American manufacturing sector. Because of these tariffs America had a great manufacturing sector that produced everything its citizens needed. The national debt was low and unemployment was also very low. True, the banks were not that great at the time, but everybody had a job and the economy was balanced and productive.

Even today most countries use tariffs to protect their manufacturing sector. China and Japan are famous for protecting their manufactures as much as they can with tariffs and other restrictions on foreign imports. They don’t want what happened to America to happen to them

The problems started in America when business people realized the extremely high profits they can make by manufacturing goods with cheap foreign labor and then selling to a high priced market like America. But this is now coming to an end since the American economy is sinking like a rock, because its manufacturing sector has been severely reduced by this unfair practice. This was done to America by the Republicans and their business partners, and they lied to Americans by saying foreign trade will bring jobs to America. But it’s clear now, America lost jobs because of this.

Financial collapse is clearly coming to America and just about everybody knows it except the Democrats, they think they just take money from the rich and give it to the unemployed and this fixes everything. But this can not fix the problem, there’s not enough money for this. It’s a merry-go-round economy that’s going to crash.

It could be that Democrats are holding on by using tax payer money to buy votes with cell phones and food stamps.

If Mitt Romney wants the White House, he is going to have to face that skeleton in the Republican closet, then reset the international rules of trade so that America can compete on a level playing field with other countries. America needs a manufacturing sector and the jobs that come with it. This requires the management skills that Romney has. The only thing Obama did to create jobs was to use the magic-wand technique with his stimulus plan that wasted 878 billion dollars on factories that no longer exist.

The real choice America has is not the choice between socialism and capitalism, it’s a choice between financial collapse with Obama, or  a balanced budget under Romney which may avoid financial collapse. But the big plus is, Romney does realize the problem America has with unfair trade entanglements and treaties, and wants to set fair rules of foreign trade. He already said that we must stop Chinese unfair trade, and we are already putting tariffs on some Chinese products like solar panels. So maybe, just maybe, America can be America again.

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