Slash the Trade Deficit to Create Jobs
The $600 billion annual trade gap is the most significant barrier to more robust growth and jobs creation, and oil and subsidized imports from China are the culprits.
In June, the economy added only 80,000 jobs, but 361,000 jobs must be created each month for three years to lower unemployment to 6%.
Unemployment is down to 8.2% from 10% in October 2009, almost entirely because adults dropped out of the labor market -- they are neither employed, nor seeking work.
Just to keep up with productivity and population growth, which average about 2% and 1% a year respectively, the economy must grow 3% a year -- unless, of course, even more adults become discouraged and quit looking for work.
The economic recovery began five months after Obama assumed the presidency, and GDP growth has averaged a disappointing 2.4% a year.
Ronald Reagan, like Obama, inherited a deeply troubled economy, implemented radical measures to reorient the private sector and accepted large budget deficits to get his plans in place. As President Reagan campaigned for reelection, his post-Carter malaise economy grew at a 6% rate. That expansion set the stage for two decades of stable, non-inflationary growth.
Consumers are spending and taking on debt again, but too many dollars are spent on Middle East oil and Chinese consumer goods that do not return to purchase U.S. exports. This leaves many U.S. businesses with too little demand to justify new hiring, too many Americans jobless and wages stagnant.
Limits on drilling for oil in the Eastern Gulf, off the Pacific and Atlantic Coasts, and much of Alaska are premised on false hopes about the immediate potential of electric cars and alternative energy sources, such as solar panels and windmills. In combination, this is making the U.S. even more dependent on imported oil, and impeding growth and jobs creation.
Oil imports could be cut by two-thirds by boosting U.S. oil production to 10 million barrels, more aggressive use of natural gas in fleet vehicles and for home heating and better use of conventional internal combustion engines.