Red Ink Continues to Pile Up

RED INK CONTINUES TO PILE UP

Ms. KAPTUR. Mr. Speaker, the red ink continues to pile up, both in our budget deficit and in America's trade deficit. The Commerce Department reported on Friday that the trade deficit is rising again, pushed up by oil prices and a flood of more imports from China. With oil imports over $70 a barrel, we know this trade deficit is going to swell as the year proceeds. The Commerce Department reported that the gap between what the United States sells abroad and what it imports rose to $63.4 billion in April, 2.5 percent higher than the March imbalance of $61.9 billion. We know that the trade deficit in both February and March just fell a tad, but it had hit an all-time high this January of $66.2 billion. And while economists noted that the April deficit was smaller than the $65 billion that had been expected, it is still the sixth largest trade deficit on record.

This is a chart that takes a look at what has been happening ever since this Congress unfortunately passed NAFTA back in the early 1990s, followed by permanent normal trade relations with China, and what could be normal about that? Every single year the red ink gets deeper.

Through the first 4 months of this year, the trade deficit is running 1.9 percent above the same period a year ago putting our country on track to run up a record deficit again for a fifth straight year. Last year's deficit, as this chart indicates, was three-quarters of $1 trillion, three-quarters of $1 trillion.

To cover this red ink, we have to borrow. We have to import capital to offset what we are not exporting in goods. America is in uncharted waters. We have never, ever experienced this situation before. Some people have commented that our country is handing over $2 billion a day to foreigners to cover this trade gap. The increase in the April trade deficit reflected a .7 percent rise in imports which climbed to $179.1 billion, the second highest level on record. In other words, the trend is in the wrong direction.

In addition to higher oil bills, imports of autos and auto parts were up and shipments of consumer goods from China such as furniture, televisions, video recorders and toys all rose. More imports coming in, fewer imports going out. Major U.S. companies like La-Z-Boy are having trouble in the market, because products are coming in from China where workers make pennies a day.

We have lost our entire television industry. Not a single television is made in this country any more. Companies in the automotive parts industry like Delphi are trying to struggle to hang on.

We are living through the hollowing out of our country. We are propping up this loss of real wealth and production capacity with borrowed capital. We are in uncharted waters. America has never been here before.

The markets are reflecting it. Today, in the New York Times, major headline: Broad economic worries drive global sell-off. What is happening is there are huge drops in the market. Standard & Poor 500 stock index fell 1.3 percent, erasing all of its gains for this year and closing at its lowest level since November. The NASDAQ fell more than 2 percent and the Dow Jones Industrial Average fell almost 1 percent. Damage was far worse in markets around the world.

American manufacturers claim, well, you know, the problem is just with China that their currency is undervalued by as much as 40 percent. But I can remember when they said that to me about Japan 16 years ago. Marcy, when the yen-dollar relationship comes into balance, we will have a trade surplus with Japan. No, no.

No trade surplus with Japan because they still have a closed market, and we act like they don't. So we take their products, but they don't take our products. So Japan has now become our largest financer, and every day we pay them interest on their greater and greater loans to us.

Mr. Speaker, America cannot continue on this course. In fact, analysts are saying the deficit will set an even higher record this year, probably close to $1 trillion, if we keep going at the rate that we are going today. The deficit with Japan rose by 2.8 percent in April to $7.8 billion.

The deficit with Canada rose 16.3 percent to $6.1 billion in April, while our imbalances with Mexico, with Korea, well, gosh, with about every other country in the whole world, just kept going up. The sad thing for our country is it looks like this year will be the first year in our history we will import more agricultural goods than we export. This is not the America we should be leaving to our children and grandchildren.

Let's elect people to this Congress and to this Presidency who will put America's financial house in order and make us independent again.

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