As we start a new year, Republicans have vowed to challenge the wasteful spending habits of Democrats by reducing spending. Many of the spending cuts offered will come from prominent programs that were designed to aid the jobless and senior citizens. Even though many will acknowledge that spending cuts are important, other concerns are far more critical to address in order to support the American economic system.
What a lot of individuals fail to realize is the fact that budget cuts are needed not just as a result of temporary economic stimulus spending measures, but because tax revenue is much lower for every level of government. Tax revenue has been greatly diminished because people are buying considerably less not because of personal choice but out of necessity.
What we are seeing the largest overseas transfer of prosperity ever witnessed. This exchange of wealth is caused by job losses in many countries which are too politically hardened to cope with the more flexible dynamic leadership found in countries like China. As political figures in many Democracies worldwide argue about fixing their financial woes, communist countries like China have the ability to rapidly adapt and situate themselves for even more growth.
As seen in the end of 2010, Democrats and Republicans are able to work with each other to get meaningful legislation passed. However, such legislation is minor when compared to the real problems they have to tackle in an effort to get Americans working again. No more can these politicians ignore the advantages of full time employment, the employer financed medical insurance coverage which many employers provide and the ability for adults to care for their children.
Quite a few people have challenged the wisdom of providing MFN trade status to countries like China. After all, China is a communist nation, has a poor human rights record and continuously exports goods which include dangerous levels of poisons. In addition to harmful products, China is also the benefactor of many of the job losses in Democracies around the globe. Some individuals think, and rightfully so, China’s Most Favored Nation trade standing really should have been revoked a long time ago.
Complex solutions for managing weak tax revenue, and bloated government budgets, will require much more then budget cuts to correct. Politicians from around the world must face reality with the fact that their domestic businesses can not compete against foreign workers that earn $0.70 per hour or less in nations such as China. To grow in a global marketplace, leaders must recognize that all countries need a manufacturing base so that their citizens are able to produce something which can be traded.