Red Ink in August Far Deeper Than Analysts Had Predicted
Representative Marcy Kaptur says the U.S. trade deficit is spiraling “out of control” and threatening America’s long-term economic health.
Congresswoman Kaptur, a leading critic of “free trade” policies, responded to this morning’s Commerce Department report that the U.S. trade deficit in August hit another record for a single month--$69.9 billion. That figure exceeded the previous record of $68.0 billion, set the month before. The August deficit far exceeded analysts’ expectations of $66.4 billion.
“These deficits are out of control and threatening our nation’s long-term economic health,” said Kaptur. “And yet the Bush Administration trade policy is just more of the same. As the saying goes, when you find yourself in a hole, the first thing to do is stop digging.”
The deficit in goods in August increased $2.1 billion to $75.5 billion, according to the Commerce Department, while the surplus in services actually increased marginally. The increase in the goods deficit was driven by increased imports of industrial supplies, capital goods, consumer goods and automobile vehicles and auto parts.
“Our country is becoming more and more beholden to foreign interests that finance these deficits,” said Congresswoman Kaptur. “We are not only shipping jobs overseas—we are shipping billions of dollars overseas. We are exporting our jobs and our wealth, not our products.
“Our country is on path to break last year’s record deficit of $716.7 billion. Our economy is now in uncharted waters. A trade deficit of this magnitude signals that our nation is no longer independent. We are reliant on foreign goods, foreign oil, and foreign credit to sustain ourselves. To compensate for this loss of economic prowess, our nation is selling off pieces of itself---everything from the Indiana Turnpike to our auto industry. The value of U.S. currency has fallen in global markets. As the dollar declined, gold prices climbed due to lack of confidence in the dollar. Saudi Arabia's investments and petrodollars have recycled through Wall Street, keeping the stock market afloat, but at the expense of every family in America. Japan's and China's purchase of our U.S. public debt securities make our nation more beholden every day. America needs a new burst of independence, not more dependence."
Kaptur is the author of the Balancing Trade Act of 2005 (HR 4405), which would require the President to take action to confront America’s staggering trade deficits. It would mandate that the President correct imbalanced trading relationships whenever the U.S. trade deficit with another country equals $10 billion for three consecutive years.
