We Cannot Subsidize or Borrow Our Way to Growth -- (House of Representatives - February 4, 2009)
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Mr. Speaker, when is the group in charge of the U.S. economy here in Washington going to wake up and take notice our trade accounts are as out of balance as our mortgage market?
Congress can't keep tweaking consumer purchasing with stimulus checks and then crossing its fingers in hopes that by some miracle it will actually lift our economy. More borrowed money simply means more short-term palliatives.
Hardworking families in our country do not need a consolation prize. They demand a real solution. What they need is a workable path by which they can become part of a growing economy. When recovery dollars are spent on goods largely imported from somewhere else, the promised bang to rescue our economy is received but as a mere whimper.
Congress must address the greater trade and tax structure problems pulling on our purse strings. Take, for example, trade deficits growing between our Nation and industrialized economies from other parts of the world. Those are just getting worse. Like the outsourcing of U.S. jobs. What are we going to do about that? Like global closed markets. Who's going to open those up? And, like the value added tax, which creates such a damper on U.S. production.
A trillion dollars more in spending by Congress will miss the real mark of healing our economy by adding the important legs of tax reform and trade reform. While trade laws and tax laws remain as critical components of real long-term recovery, we cannot subsidize or borrow our way to growth. We are already paying over $200 billion on borrowed money to foreign interests, and those numbers are going to grow. And they are more than willing to put America in hock.
Wake up and take notice. If we want to see the benefits of growth, America must produce, not placate its way to prosperity.
As we approach NAFTA's 15-year anniversary, let's take a look at a textbook example of failed promises of prosperity. When NAFTA passed Congress by a tiny margin in 1993, proponents like President Clinton said that this new trade agreement would bring unprecedented prosperity and create millions of jobs across America. It was said the agreement would lock in trade surpluses, expand trade gains, and solve many of the social and economic ills facing North America, like illegal immigration.
Let's take a look at the record. On its 10th anniversary, the U.S.-Mexico trade surplus wallowed into an estimated $40 billion deficit.
And U.S. jobs reported lost? 879,000. And workers' wages? They failed to keep pace with productivity gains. We have not seen a single year of trade balance with Mexico since 1994, much less a surplus as was promised.
The growing trade deficit with Mexico is just one staggering figure in our trade deficit accounts. Wages in Mexico have fallen dramatically, and the drug trade has snuggled up against our border and yielded murder as well as violent crime that has surged over into our country in places like Phoenix. And there is an upheaval churning on both sides of the border.
Fifteen years ago, NAFTA was sold by the Clinton administration as a development strategy for Mexico, promising alleviation of poverty and inequity, while simultaneously halting illegal border crossings because it promised so much opportunity at home for Mexicans. Sound familiar? It is no surprise that many of the Wall Street proponents of the bailout were the same ones who wrote NAFTA 15 years ago and fought on the side of big business, just like today. Take Citigroup, for example, or Goldman Sachs. They were in there with both fists.
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A healthy economy will require policy changes, not cough drops. We need products on our shelves that are produced by Americans. We need real wealth creation here at home. We need trade that is prosperous and balanced, in the black, not in the red. And, we must infuse the power of our marketplace here at home to produce long term, to spur the necessary social and physical infrastructures to restore economic strength to our Nation rather than growing weakness. We need free trade among free people. America needs balanced trade accounts, not more trade deficits and one-sided trade agreements. And America needs production, not subsidy.
Most of all, we need changes in our trade policies and our tax policies that create real investment and long-term growth in our Nation so we don't have to continue borrowing our way forward and making our children and grandchildren debtors into the vast part of this new century and millennium.
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