Just catching up on some things following a trip last week. You’ve heard me say repeatedly that our deficit spending is a direct result of our trade deficit – that it’s essential to return to the economy those dollars that were drained away by imports, offsetting the negative consequences. Unemployment benefits are a perfect example and the above-linked article details just how massive that program is: over a half trillion dollars in the past five years.
Legislators are desperately seeking ways to cut spending to avoid the “fiscal cliff.” If they want to cut spending, they’re looking in the wrong place. All they need to do is fix our idiotic trade policy, now responsible for a cumulative trade deficit of nearly $12 trillion since our last trade surplus in 1975, and the spending will take care of itself. Spending on unemployment benefits would melt away, as would spending on a myriad of other safety net programs designed to maintain an illusion of prosperity.