Wednesday, October 8, 2003

Important issues for '04: Job loss to overseas, runaway debt

I enjoyed Raymond Keating's editorial on immigration even though I totally disagreed with him. I would like put my two cents worth in on the immigration issue and discuss a few more important issues briefly:

1. The need for workers is not a legitimate reason to tolerate unlimited immigration. If we need low-end workers, then allow guest workers to come here temporarily. The fact is our population will be as large as that of China or India in a hundred years if we keep letting 30 million people a decade come here. The world is undergoing a population explosion. The U.S. must not be the relief valve for Third World overpopulation.

2. Our trade deficit with the world has reached $400 billion per year and is still growing. If you wonder why this is a jobless recovery, it is because the jobs are being created, just not here.

The fact is there is a massive labor glut in the world. There are billions of Third World people that would love to do your job for $5 a day. Increasingly American businesses are happy to let them do your job (for $5 a day). Unfortunately as more and more goods are produced with rock-bottom wages, demand dries up because the Third World workers who produce all these goods cannot afford to buy the goods they produce. So the goods are sent to America. In the end we will not buy them either because the jobs have all gone overseas.

We are financing our trade deficit with debt. That $400 billion comes back to this country and is used to buy assets or debt. At $400 billion a year, how long will it take before we are all tenants in our own country?

Free trade is a farce. Unilateral free trade is disastrous. Our 20-year experiment with free trade has temporarily benefited the consumer at the cost of our long-term prosperity. Trade is war. The Asians and Europeans understand this. They will never settle for balanced trade with the U.S.

I think we should raise punitive tariffs to force balanced foreign trade. This tax increase should be balanced with an equal income tax reduction.

3. The federal deficit and runaway federal spending are another anchor around our neck. We have a $450 billion a year federal deficit that is growing, and in 10 years the baby boomers will start to retire (which will worsen the situation). In 20 years, the federal debt will probably be over $20 trillion (if we can find someone stupid enough to lend us the money).

Eventually government benefits will have to be slashed and taxes will have to go up, way up. You can look forward to high income and excise taxes, but also new forms of tax such as federal property taxes and sales taxes.

In the end our experiment in big federal government will collapse like every other Ponzi scheme eventually does. If you are relying on the feds for retirement income, drugs, and health benefits, then you are a fool (I hope you like cat food).

4. The civil legal system in this country is unique in the world. We are the only country that allows a predatory class of people (trial lawyers) to manipulate the court system to shake down business on such a large scale. The concept of liability has been so stretched that any small injury can justify a bankrupting lawsuit.

If American business is afraid of being sued, will they innovate or take entrepreneurial chances? No! The end result is that all the innovation eventually moves overseas. We need tort reforms such as a loser-pays system where the loser of a law suit must reimburse the winner's legal bills.

Our tax system is just too complicated. We could use a better system like the Linder Fair Tax System. It is basically a national sales tax that takes the place of all other federal taxes. It raises the same revenue, but without 1040 forms and tax attorneys. Look it up on the web.

The 2004 election could be one of the most important in our history. We are running out of time to deal with these and other important issues.

Bill Gilmer

wmgilmer@mindspring.com