Economic Truths

The current administration has been, and will remain, a Corporate Executive on leave style of administration. It stands as standard fare among Corporate leadership that increased Public debt depreciates the Dollar, and that a devalued Dollar will lead to greater Exports. It has the added value in that Corporate and Business concerns escape taxation, and can avoid financial-Cost communal responsibilites. They end by being allowed lucrative Government supply contracts, where Contract provisions are not well monitored, and excess Cost increases are ignored. Corporate leadership claim patriotic zeal in the evasion of Corporate responsibilites. This outlined stance by Corporate leadership contain real seeds of destruction.

Corporate leadership feel justified in turning to foreign production for materials, Parts, and Product; this all based on the maximization of Profits--claiming the virtue of the free market system. The first statement must be that it is not a free market scenario. The current matrix of tax accounting and regulation actually discriminates against domestic production, which has to bear the social costs evaded by foreign production or importation. Corporations are allowed to deduct their foreign production costs from domestic taxes like domestic production, paying no equal social cost taxation as does domestic production. It is not a level playing field for domestic production.

Such state could even be accepted, if benefit actually accurred to the American economy. The facts, though, speak otherwise. Domestic production has been lost solely due to lower Wages and social costs of foreign production. Corporate rheutoric proclaims lower cost to the American Consumers, but is it? Increased Unemployment has suppressed Wages, except within the sector of hig-tech industries, said factor to be explored later. American Consumers can be deluded by the lower Consumer prices, but they pay higher Income taxes, Property taxes, and Sales taxes with a suppressed Wage framework; the formula for increased Consumer debt, higher framework Costs--Energy, Communication, and Food, with less resilence in their economic foundation. Americans gaze into a future of loss of Standard of Living, if the Dollar devalues without increase in Exports.

Will Exports increase? The answer is No! Business and Corporation concentrate on the high-tech production, because of the high Profit ratios--rationale for the increasing Wages within this sector. Basic domestic provision of Product--for which most American labor are trained to furnish--is lost to foreign production; this transfer simply due to previously acquired higher standard of living. The Unemployment incurred destroys those gains, magnifying the social costs involved. Domestic production costs escalate with higher taxation--and need to scale back current labor force.

Will devaluation of the Dollar help? No! The economic boom enjoyed by less-developed Countries derives from sale of Product to a non-producing United States. The current matrix of American Exports are high-tech Products to a relatively saturated foreign market stream, which will not markedly increase American Exports acquisition because of lack of current need and high cost even with Dollar devaluation. These same Countries lack the economic reserves of the United States, and would close their markets to less-tech Product lines due to the need to employ their own labor force. Total actual quantities of American Exports will not increase by any real percentage(maybe 7% per year), not sufficient to keep pace with the increase in American Imports.

Conclusion: American economic performance will increase only with return to domestic provision of basic American Consumer Products. Imports should be taxed in such manner that it affects Corporate and Business profits, not overburdened American Consumers. This transition demands a stable Dollar to acquire materials for domestic production from foreign sources. The United States Government must stop spending in deficit of revenues. This end can only be accomplished by cancelation of lush Government supply contracts, reintroduction of effective Business and Corporate tax rates through elimination of Tax credits, Investment credits, evasive tax accounting, and plain tax evading movement of untaxed Funds overseas. lgl