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America is Now More Vulnerable than at any Time in History video

Published 03/05/09 Thomas Heffner - Print Article
E-mail - editor@economyincisis.org


Editor's note: This article first ran in 2007, but is even more relevant today. It has been updated with the most current statistics available.

America is losing control of its economy and is now quietly being taken over by foreign countries through their purchase and control of our strategic industries (TV manufacturing is now 100% foreign owned, sound recording industry 97%, movie industry 75%, metal ore industry 65%, book publishing 63%, cement industry 81% and many of our other major industries are now foreign owned).

The American economy is no longer competitive. We can't compete with Chinese wage rates, Japanese technology and capital investment, or European trade protections. Any business that can’t be competitive will soon go out of business. Many of our major businesses are now non-competitive and are forced to outsource their manufacturing, close up or sell out. We have sold over 16,600 of our major companies since 1978.

We have become uncompetitive through the effects of ill-conceived policies, disastrous trade agreements (WTO, NAFTA and CAFTA), escalating trade deficits, crumbling industrial infrastructure, and the sale of our most valuable companies.

We now no longer produce enough for ourselves and are increasingly compelled to live on imports, borrowed money, and the income from the sale of our best companies.

Balance of Trade Deficits (The means through which foreign countries accumulate our money to buy us out)

2001 - $365 billion = $694,000 per minute
2002 - $424 billion = $807,000 per minute
2003 - $497 billion = $945,000 per minute
2004 - $608 billion = $1,157,000 per minute
2005 - $711 billion = $1,353,000 per minute
2006 - $753 billion = $1,433,000 per minute
2007 - $700 billion = $1,332,000 per minute
2008 - $677 billion = $1,288,000 per minute

*Recession throughout 2007 and 2008 dampened all U.S. consumption.

These are funds accumulating in foreign hands because we buy more from foreign countries than they buy from us. Foreign companies and governments use this money to buy any US company they like (most of our companies are for sale on the open stock market).

With the sale of these companies go our future production, profit, technologies, taxes and the means through which we became a super power. As more of these companies fall into foreign ownership and control we have fewer American owned companies remaining that can produce products to sell, so our balance of trade deficits are destined to increase yearly with no hope of stopping or reversing this trend until we have no companies left to sell.

We will then have developed the profile of a third world country. Our lifestyle will revert back to conditions similar to those when we were subjected to live under colonial rule when England controlled America.

Through their foreign trade surpluses, countries like Japan and China each now have accumulated $1 trillion of currency reserves. These funds are economic bullets poised to strike and take out most of our companies listed on our stock exchanges.

Many countries, particularly Japan and China manage the political and economic matters of their country like they were conducting a war - to destroy competitors. America has just lost the all important economics war. We lost it because we didn’t even know we were in it, so we planned no defenses like tariffs to protect our industries. We had no offense to create conditions that would allow our manufacturers to profit in America without outsourcing its manufacturing.

We have been totally misled and blinded to reality. We are now being controlled by our competitor bankers (Japan, China, UK and others) from whom we have borrowed and now owe trillions of dollars.

In globalization, an advantage for one country often results in a disadvantage for another. Presently we won’t or can’t compete with Chinese wage rates, as a result, China had a $230 Billion balance of trade surplus in 2006 alone. We can’t compete with Japanese superior technology, as a result, Toyota continues on strong, while American automakers are forced to seek government bailouts and assurances.

We are now in wars in Iraq and Afghanistan. We have no plan to win these wars and we have no exit strategy for Afghanistan. We are presently bleeding to death and to debt in these wars. If we admit defeat and pull out we may have a better chance to survive.

We have just lost the global economics war. We may survive but not like we were. Our standard of living will become greatly diminished. We presently have no plans to change or overcome the devastating effects of this loss.

We are temporarily supported through the good graces of Japan and China from whom we receive much of our needed merchandise and loans to run our government.

What is the matter with us? Are we blind, are we stupid? Can we not see we cannot continue like this, living on imports, debt, and from the sale of our best companies? Please ask your congressional leaders what they are doing about this.

Click Here For Solutions To America's Economic Problems

Click here to contact your Representative in Congress.

Unless the above article is already copyrighted, this article is licensed under a Creative Commons Attribution-No Derivative Works 3.0 United States License, EIC grants permission to use this article in whole or in part provided attribution is given, preferably in the form of a link back to EconomyInCrisis.org.

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Article Comments From Readers

guest says "America in trouble" on 11/10/09
Since Obammer, been president, does any body really care? here in the Detroit area the OBammer can do NO WRONG!!!.

guest says "America is no more." on 08/31/09
As i said before, May these Internationalist thinking Bastards ROT in Hell. Because of what they did to this Great Nation. As these One-World bastards want to merge the u.S. in to the New World Order, the only way it could be done is to Destroy, the United States. They are Doing It.
It is Not Obamas fault, we have to go All the way back to Woodrow Wilson, CHECK your history.

guest says "Third Party" on 06/15/09
Even if we lose 40% of our GDP by 2012, it will be very difficult for a third party to win. First of all, a third party President will not be able to do anything among Morons in the Government and Academia. A third party whole congress will not be able to do anything, because they have no idea how to solve these problems. We should know how even opposing candidates run their campaign in the next election.

It is like asking why Greek civilization died and why the present Greeks could not get it? Or the Romans or the British empire...

By the way, the British are working on bringing back their commonwealth but having a tough time. These are all wishful thinking...

But it will be whole different story with the next Chinese Empire.

wheedle says "Prepare for hard times and instability." on 06/15/09
Elected officials from both parties can be equally blamed for the economic scathing the American people are faced with.Our elected officials swore an oath to protect and defend the Constitution and the American people and yet both are in peril.As long as Americans choose party lines in the sand over unity our freedom and country will continue to erode.Americans will wash their hands and rid themselves of the democrat and republican parties when a viable Third Party emerges with the promise of returning to honorable values.This economic debacle created by the two-party leadership will not end well.Our government is preparing for civil unrest.You don't have to take my word for it.Check out these web searches,,,,IMF chief warns of riots in response to economic collape,,,,,gerald celente worst economic collapse ever,,,,military prepares for civil unrest,,,suburban survivalist jim wiseman,,,,,get out of lost vegas,,,,.Americans across the country are preparing for very hard times.Instead of participating in the 'blame game' people need to realize our economy is shrinking.Government is seizing private industry,raising taxes,and borrowing money to sustain itself.Unemployment,foreclosures,and bankruptcy continues.It will take years for our economy to stabilize.Again,you don't have to take my word for it.Check it out for yourself. E PLURIBUS UNUM

guest says "Rallod Economy" on 05/19/09
The Ingenesist Project (TIP) specifies the structure of an innovation economy where human knowledge is tangible outside the construct of the corporation, academia and even government. The Rallod, in this model is a currency backed by innovation (future productivity based on current innovation) whereas the dollar is backed by debt (future productivity backed by the promise and assumption that future productivity will occur). The rallod in this model can, in fact, accommodate negative interest rate because appreciation is not a function of risk and negative productivity is quantifiable.

http://ingenesist.com next economic paradigm series. A fun read

guest says "THE ECONOMY CRISIS IS MAN-MADE DISASTER" on 04/22/09
REASONS:

1. Greed

2. Greed

3. Greed

4. Greed

5. Greed

6. Greed

7. Greed

8. Greed..............................

guest says "economy crisis (Looking Back)" on 04/22/09
Let us look back at things that Americans can't buy.

1. Americans can buy, create devastating weapons, sadly they failed to win wars repeatedly. The worst of all, Hollywood movie makers exaggerate everything especially RAMBO 1,2,3.

2. American Hollywood couples can show to the how happy they are when they get married. They buy huge vehicles in order to show to the world that they can buy anything that money can buy. Sadly, it lasts for a few seconds. I wish you could buy happiness in marriage.

3. American goverment especially George Bush is the most stubborn leader the world has ever seen. George Bush is naturally uncivilized because he purposely cultivated hatred among some Americans to attact Iraq because he had a long revenge against Saddam Hussein. Even animals know what George Bush did was wrong. The greatest mistake that Americans have ever done was they failed to see the dark sides of George Bush before they elected him as their President.


4. Americans especially the government must accept that allowing to many foreigners to be their permanet residents is just like putting 1000 fish into a small aquarium. Don't imagine the consequences because experiencing doubles the pain.

Mani Jack (Ibanayan2003@yahoo.com)

guest says "Thomas Heffner understand the tragicomic political oblivion of Washington:" on 04/04/09


There is a real economic crisis which is the artificial scarcity of credit managed in the US by lobbyists owners of the politicians of Washington. This permanent real economic crisis attacks every worker of the World and is managed to enrich the rich at the expense of all the disposed poor people of the Orb. President Obama is obeying the dictums of the politicians and he is not giving America (and the World) the change he promised in his electoral campaign. His advisors keep him in the ”Washington bubble”, and no communication from economists believers of modern engineered economics, human economics, Main St. economics or whatever real and tangible, are “filtered” by these advisors. I have written several technical briefs to President Obama through Valerie Jarret, Senior Advisor of the White House, without even the courtesy of an acknowledgment. These briefs suggested that President Obama must consult with the engineers of the Tennessee Valley Authority, who helped FDR to resolve a real economic crisis with public works managed by competent technicians, not phony preachers of the corporate globalisation which is a grotesque scam over Humanity.
Thomas Heffner shows reality... A reality that began around 1929 and has been increased by the political corruption of Washington managed by the tycoons of Wall Street. Of course, China topples the USA in the world market as Mexico, Iran, South Korea or Venezuela. Their leaders know that their wealth is the tenacity of their workers. The leaders of America since FDR are owned and managed by the stock markets of the World and even Obama who is a genuine, ethical democrat is kept in the political bubble of Washington by his own political advisors that intercept any communication going from the reality of Humanity to the Oval Office. The President is betrayed by his own people as FDR was betrayed by his financial advisors that were managing the White House for the speculators in all the Stock Markets of the World. Loyalty, ethics and honour do not exist in the politics of Washington... Me, me, me and only me is the real ethics of the political environment of the Oval Office. Because I don’t need hand-outs I can afford to speak the truth, as loud as possible.
I imagine that the Editor of this Blog which appears objective, has the pull to inform President Obama and the First Lady, that Valerie Jarret is hiding five technical briefs and three treatises on Scientific Human Economics of mine sent to the First Family by TEIC, global engineering-research-non-profit organisation that I manage. As a Canadian Engineer having no vested interests in the simple technical solution designed by my 250 colleagues and associates of the Third World, I have tried to reach the President because I want to protect the future of my grand-children... The rest is insignificant and it isn’t worth my bothering with it.

Jorge Torrealba, P.Eng, Mathematicinan and diplomed Executive,
Director General, Techno Economics International Consultants,
Halifax, NS, Canada,
1-902-448-7417
human.economics@ns.sympatico.ca
www.e-libro.net

guest says "Economy in crises" on 03/06/09
Where did it go? You can't say that the American citizens engineered or initiated this.Niether can the total blame be placed on President Barak Obama. So just who came up with this great scheme?

guest says "We are screwed" on 03/05/09
I just got a call to hire senior information technology developers from India at $15 per hour. We are definitely screwed...

-BIGuru

guest says "Strategic Industries miss" on 02/18/09
TV manufacturing, sound recording industry, movie industry....Strategic? Are you kidding me? We've regulated ourselves out of the mining and other raw materials production business and it makes us non-competitive against our foreign competition. Companies move to where they can make money and its not here for reasons that we can blame ourselves for not them. Stop voting for people that increase regulations and value a "marsh mouse" more than your job or your families income and this will turn around. Lower tax rates and regulations on companies and you can keep and grow those companies here...Ireland is the success story of the past 20 years on hard manufacturing and high wage job growth and they did it by allowing companies to locate there for the right reasons...not bribing them to stay and then bailing them out when unions and liberal politicians burdened them to the point that they could no longer survive...Detroit is the best example of how not to do it in the world...AND I ONLY BUY AMERICAN MADE even when it means that I have to do without (my TV is older than dirt)....do you? I bet not, and the full parking lots at places that don't sell US products tells me that most American's don't either.

biguru says "The Dollar Business" on 01/15/09
The Dollar Business - an interesting scenario

The popular conception is that when we buy Trillions of Dollars of goods from foreign countries, we pay in Paper Money. Sooner or later they will buy from us and we will be fine. But those foreign entities may have a different but all too real plan. They can use that money to buy companies in the USA that poses a threat to them. Since we are a law abiding nation, we can not very well nationalize those entities.

Now fast forward to a few years. These foreign entities are sitting with a lot of dollars.Then they start trading between themselves using the dollar, which happens now too. Then they replace that dollar unit with a new unit call it Rallod without missing a beat. Then where do we go? Then we have to get a loan in Rallod to import their high end products since we will not have much to sell them. We can not very well gear up to produce stuff using accountants and lawyers and politicians since we would not have any home grown engineers left (at the present rate). That would be Check Mate. (a la Sun Tzu - the art of war). Of course this will not happen, we are nice people, we are a hyper power, we win military wars. But can we - an Economic War?

gspencer says "Trade Deficit" on 01/15/09
Other countries are still accepting our dollars for the goods that we import & consume because they can redeem these dollars for title to anything and everything of value (real estate, forests, industries, breweries, hotels, factories, casinos, financial institutions) that is located in this country. This is like selling our body parts to keep from working!!!!!

What will be the buying power of the dollar when we have nothing left to redeem for the dollars earned by foreigners?????????

guest says "Wow...lots of hate" on 10/17/08
True, you are indeed forced to buy many foreign products (because they are the cheapest, hence they will be produced. It's that simple), but if America were to drop it's minimum wage, no other country could possibly compete with it. Why? Well, obviously, it would be MUCH cheaper to make things in America, and the value of the American dollar would skyrocket. Milk would be worth pennies, and coffee would be a dime. Like the 1950's. Except that no other country could compete with an American dollar worth 70 times what it would be worth then (If the minimum wage is 7.50, then working for .10 cents would basically do this). That's like making the peso worth 0.000000001 pennies, and the chinese "people's dollar" worthless as well. NO OTHER COUNTRY COULD BUY U.S. PRODUCTS. They would be too expensive, and they'd just be worth pennies. Money in U.S. banks would also skyrocket in worth, since every penny earned by your interest rate is now worth far more than it was before (that is, assuming you have money in the bank). You could retire with 10,000 dollars in the bank at 4% interest, basically (although, a more accurate figure might be higher. Hey, I'm just in high school here!).

Of course, the WTO would never allow the U.S. to drop minimum wage, because it would be obvious they could not compete with us.

guest says "Guess whos to blame?" on 10/31/07
You bastards who voted the devil into presidentcy! Screw this country...you have it to where the mexicans own it now, and theres no such thing as "THE AMERICAN DREAM"! Now its the "MEXICAN DREAM" Fuck you Bush I hope they bury you! You need a 45 cent bullet in your head to get our economy back in order! Cheapest way out! Now Im just another american that owned his own house and had great children that Im afraid to see go through this police state run bullshit! Why do you think teenage suicide is at an all time high? He has run this country to the ground to line his own pockets! Ive been on the face of this earth for 45 yrs and have never seen it worst then since bush has been the president! WAKE UP AMERICA AND TAKE OUR COUNTRY BACK FROM THE DEVIL HIMSELF!

guest says "second guest is an idiot" on 06/29/07
Yor are right, the second guest suggests America has enough money to buy... he probably has no idea of what constitutes money. I wonder how much money second guest has after subtracring liabilities

guest says "the second guest is the idiot" on 03/16/07
you do not see clearly. free trade has never been a good thing and how do you expect to use certain items as a consumer, that are not made in america anymore, without buying it foreign. YOU ARE FORCED! There are goods that you need to live. And how about if you go work for ten cents an hour, like these people who have no other option. you are a disgrace! i would treat a dog better than I would, you. It has more decency. Your unemployment figure is wrong. you do not understand economics, and you are one of the reasons this country has been sold into slavery. And you to will be a slave and will know what it feels like to work for 10 cents. take your retard ideas elsewhere.

guest says "America Is Now More Vulnerable Than At Any Time In History " on 03/15/07
I would like to know if America would not be able to use its military muscle for economic gain? Did the US earn money from the Saudis in the war against Iraq in the 1990's? But it does not seem it is making any money or getting any oil from its presence in Iraq? The US can never be treated as a colony as suggested in the article since it has the military might to subdue and to occupy non-nuclear nations, particularly of the Third World variety.
Why can't the US cancel foreign debt? But I believe manufacturing is still important and doing well in the service industry in not enough. Good luck for this bastion of democracy and liberty. And, I hope others, including powerful and highly organized constituencies in the US do not abuse it. Have not other nations, such as the UK and Europe used it to their advantage, for example, to fight communism? What about South Korea? The Americans are extraordinarily nice people but they are a bit naive and get exploited by lobbies from within and nations from without! The common American needs to be more informed about the world and as to how he can put his weight behind checking the exploiters! But who is going to educate the nice American about what really is going on?

guest says "idiotic" on 03/14/07
The arguments presented in this article lack common sense as well as any correct economic analysis. Free trade is always a good thing. We are not "forced" to import foreign goods, rather we choose to import them because we have enough money that we cannot produce all that we want. The unemployment rate is at the generally agreed lowest natural level it can be (about 5%) and inflation is low. Any low end jobs that move oversees do so because it is no longer economically efficient for them to be here. Many "foreign" companies employ a great deal of Americans (Toyota does the majority of its prodcution in the U.S.), and many Americans own stock in foreign companies. Besides, the future of the American economy is service and information based, not in archaic manufacturing factories of the industrial era. The only reasonable point made is the massive defecit and debt we have running, though the majority of it is for hugely expensive entitlement programs and inefficient government beaurocracy. By far the worst argument however, is that we are somehow reverting back to colony status. European nations used their colonies for natural resources and as markets to sell back manufactured goods at inflated prices by legislating against manufacturing. We on the other hand are the biggest consumer of natural resources (oil), and import from other countries because their goods are more efficiently manufactured at a cheaper price, not because they are forcing us to. Finally, other countries buying our currency suggests the strength of the dollar, not weakness. Furthermore, these countries do not hold us hostage or influence us by holding dollars. In fact, it gives us a degree of control over them (would you tick someone off who owed you a lot of money if you ever wanted to be repaid). If anything is troubling about America's future, it is the decline of education and the huge size of government. We should work to control these problems, not complain about countries which are outproducing us. If they want to pay their workers 10 cents an hour... fine. That means cheaper goods for us.

guest says "We can't let this happen" on 03/14/07
Bush is the biggest terrorist of all time. If we keep letting him to whatever he wants we will end up worst than Iraq.

guest says "reverse revolution" on 03/11/07
The War for Independence freed us from foreign domination. Now fools make us dependent again just so they can shop the world for everything.

guest says "loss of a nation" on 03/11/07
with every other country buying in to america, we americans are losing are own country.

guest says "CNBC" on 03/11/07
CNBC says the US economy is the greatest story never told according to Nutlow. Our Treasury Secretary basically says that foreign purchase of US debt shows that the US is still the best investment on the globe. As Merle Haggard once sang, "We will all be drinking that free bubbleup and eating rainbow stew." We must not allow negativity to invade our thinking as I was advised the other day and further advised as far the National Debt goes we can just print more money and pay it off. Mark Twain I believe once said, "For every complex problem there is a simple answer and it is wrong."

guest says "George Bush" on 03/10/07
George Bush is the most anti america president in history