Slash Trade Deficit to Create 5 Million Jobs
NEW YORK ( TheStreet) -- Thursday, the Commerce Department is expected to report the deficit on international trade in goods and services was $51.7 billion in February, down just slightly from January.
The $620 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 March, the economy added 120,000 jobs, but 362,000 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, largely because working aged adults are dropping out of the labor market -- they are neither employed, nor seeking work.
The most effective jobs creation program has been to convince more adults that they don't want a job or it's futile to seek a decent position -- that phenomenon has accounted for more than 80% of the reduction in the unemployment rate.
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 Barack Obama assumed the presidency, and GDP growth has averaged a disappointing 2.4% a year.
Ronald Reagan, like President 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 Mr. Reagan campaigned for reelection, his post-Carter malaise economy grew at a 7.1% rate. That expansion set the stage for two decades of stable, noninflationary growth.
Most economists agree, growth is inadequate because of too little demand for what Americans make. The trade deficit is the culprit.
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, administration energy policies are pushing up the cost of driving, making the U.S. even more dependent on imported oil, and impeding growth and jobs creation.