Nation Headed in Wrong Direction for Jobs and Economy

NATION HEADED IN WRONG DIRECTION FOR JOBS AND ECONOMY -- (House of Representatives - September 23, 2004)

The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.

Ms. KAPTUR. Mr. Speaker, our Nation is headed in the wrong direction on jobs and our economy. And one-party control in the White House, in the Congress, in the House and in the other body, the Senate, has made for a plundering of our national wealth. We have not seen the type of actions that have been going on in this Capital since the time of the 1920s in the last century: extravagant borrowing, historic debt levels, a rising gap between the rich and the poor and a sluggish job market, real softness, even with the new term being invented, "jobless recovery."

Now, the President says that the reason this is happening is because we are at war. Well, Mr. Speaker, this is the first administration since the time of Roosevelt that has not been able to create jobs during war. In fact, if you look, after World War II, we have had job creation by every U.S. President, Democrat or Republican, until now. War always leads to job creation, but not under this President, because the fundamental economic policies are all out of whack.

This week, in the business pages of the New York Times, the chief of the International Monetary Fund talked about the hazards to the international economy as well as to the U.S. economy because of our budget and fiscal policies. He says that the United States is going to have to tackle its growing indebtedness to avoid a threat to the entire world economy. He says that our deficit remaining well over 4 percent of gross domestic product for years to come is a risk not just for the United States but, indeed, for the entire world.

He talks about the rising budget deficit, which this President supports at $420 billion more this year, and references the extraordinary trade imbalance, now at a half a trillion dollars, the highest in American history, and he says, these deficits could set off a sudden fall in the dollar and reverse any chance of global recovery.

And others say that these conditions of a high-budget deficit and an extraordinary trade deficit will result in the quiet erosion of American dominance of the world economy.

Similarly, an economist with the New York Times had an article this week, the title of which is U.S. and Trade Partners Maintain Unhealthy Long-term Relationship, and the Institute of International Economics, a center of expertise in this field, says, America's constantly rising deficits, our budget deficit and trade deficit, are a disaster in the making. No one could say it more clearly.

He says, this substitute for Americans, the positive side of the equation is they get to consume more than they produce. And maybe that works for a short time. But the down side of the United States is that most of their imports are purchased on credit extended by trading partners. And that indebtedness is now over $4.4 trillion, nearly twice what it was just 4 years ago and an increasingly costly arrangement for Americans and a potentially risky one of the Nation's foreign creditors, which means that another institute has agreed with what the head of the international monetary funds as said.

Experts are saying that they are alarmed that this set of arrangements could unravel abruptly with the dollar falling in value and the dollar rising and with inflation rising. The dollar falling, inflation rising, that happened during the Great Depression in the last century.

The United States, this article goes on to say, is caught in a gradual, almost imperceptible deterioration brought on by the yawning deficit in trade and other international transactions and the deterioration is going to continue for a long time. No one knows how this situation will unwind, but it certainly will.

The current account deficit was equal to 5.7 percent of domestic activity in the second quarter and this was a record and unusually rapid rise from the last quarter. In fact, the trade deficit has risen to a level of $477 billion, a 10-percent rise just over last year. Again, this article says the dollar in response would have to fall in value, forcing prices to rise in the United States.

Mr. Speaker, I know my time has expired, but let me say that the U.S. is headed in the wrong direction. We need a fundamental change. That change can take place on November 2. Let us put adults in charge.