The U.S. has some of the highest labor costs in the world. In addition, our employers provide relatively high-cost fringe benefits.
In our expanding, free-trade environment, how can we hope to compete with low-cost foreign providers of labor-intensive goods and services?
The only way is to make sure that other cost factors are competitive. For example, energy costs could be considerably lower than at the present time if the U.S. would fully exploit its superabundance of energy in the ground and below the sea. This means developing our coastal energy, reopening the Gulf, exploiting the Alaskan fields, approving the Keystone Pipeline, and developing government owned land. It is reported that the U.S. has more energy in the ground than any area of the world. So why don’t we go get it?
In addition, to be competitive, we should lower taxes on industry to an absolute minimum. Corporate taxes are, in fact, passed on to their customers in the form of higher prices. By reducing taxes, we can help American industry compete with foreign competitors.
There are, of course, other remedies to the negative balance of trade problem facing our country. One solution is to curtail the GROWTH of imports – limiting the GROWTH of imports (not exports) until trade balance is achieved. This could be accomplished quite simply by the government mandating a limit to the GROWTH of purchases of foreign goods and services by American companies — based on year-over-year GROWTH.
The cost of imported goods and services exceeding the mandated limit could be disallowed as a gross profit deduction for tax calculation purposes. Year-over-year import allowances could be traded (bought and sold) in a free market. Thus businesses most in need of imports could buy additional importation rights from other companies.
Frankly, it is a no-brainer solution and one that could be implemented in months rather than years. It would, however, require the United States to negate some trade agreements; but this would be well worth renegotiating to achieve balance of trade and put American workers back to work, producing the goods and services that Americans require.
The absence of economic leadership under the current administration is deplorable. President Obama’s Fabian Socialistic approach doesn’t work and is outdated. Clearly, history has demonstrated that competitive, free-market, Constitutional, free-enterprise will produce the highest level of prosperity for the greatest number.