It is easy to say we need to stop printing, borrowing and spending money. It is time we realize we are virtually living off our friends: China, Japan, Canada, Mexico, Taiwan and too many others. At least 50 percent to 75 percent of our taxes, printed money and other income go to them.
The dollar may not be devalued in this country, because most dollars don't stay here. But you can bet U.S. dollars are becoming less valuable everywhere else, because we have little other than a few smartphones and some agricultural commodities to sell them.
Have people in the U.S. ever considered what would happen if our world suppliers suddenly cut us off and we had to supply all our needs? I think not. Here is what can and most likely will happen.
They may not cut us off, but eventually, if we do not have anything they want, our dollars will not be accepted for their goods or the dollar cost to us will be so high we may be able to manufacture these products in the U.S. and be competitive.
If our union and other workers are willing to work for reduced wages, and if CEOs and executive officers are willing to quit paying all the profits out to themselves and lower the prices of our products, we may be able to get back into the world market.
Currently, they have priced themselves out of the world market and are still asking for higher wages, resulting in plant closings, layoffs and unemployment.
Many of the executive officers have salaries, incentives and bonuses of $5 million to $10 million in cash and stock, which amounts to about $50 million in the average corporation. If this money were put back into operating costs, their products manufactured in the U.S. would be more competitive.
Our objectives should be to lower our production costs in the U.S., quit giving tax incentives or subsidies to our corporations operating outside the U.S. and put tariffs on all products that could be manufactured in the U.S. We could also give tax breaks and subsidies to manufacturers that return to this country. The tariffs on certain products should also apply to all manufacturers of that product, not just to U.S. corporations.
Needless to say, consumer costs would be higher on almost all products, but this is the only way we are ever going to get back to being a normal, self-sufficient, productive country with more jobs, less poverty and more people able to own homes and afford medical care. We could reduce the disparity between the rich and poor and create more ability for the currently unemployed to pay their taxes.
What is the answer? Compromise. Everyone is going to have to accept higher prices, some diminished wages and a lower standard of living.
Corporations and unions will probably have to be satisfied with a modest profit and be competitive without completely eliminating world trade.
World trade is essential, but the original meaning of "trade" is to swap products for products, not products for paper money as we have been doing the last 10 years. The countries that receive our paper money need to be able to buy merchandise from us, not land, timber, corporations and politicians.
Jack H. Knowlan Sr. is a Jackson resident.