Bush setting U.S. up for financial fall

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Sun, 20 Mar 2005 12:55:20 -0800 (PST)

Bush setting U.S. up for financial fall

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Bush setting U.S. up for financial fall

 

March 15, 2005

 

BY JESSE JACKSON

 

The U.S. military has no rival. No economy is as large and dynamic as

ours. Our movies, our music, our language are in demand across an

ever-smaller world. America's technological innovations still set the

pace in many fields. America's ideals of democracy, free enterprise,

freedom of speech and assembly, tolerance and diversity are on the

move. " We Shall Overcome " is sung in many languages by many movements

in every continent of the world. The state of the union is strong,

President Bush says.

 

Is it? Beneath the bluster of the Bush administration, our isolation

is growing and our independence eroding. Our trade and budget deficits

continue to set records. The administration and the Republican

Congress don't even include the costs of the war in Iraq -- now headed

toward $300 billion -- in their budget. The war is being fought on

credit, with the loans coming from Chinese and Japanese central

bankers, and the debt sent to our kids.

 

Bush prefers to act alone rather than nurture allies and build

consensus. Despite Secretary of State Condoleezza Rice's " charm

offensive " to Europe, Bush's true intent was signaled by the

nomination of John Bolton, darling of former right-wing Sen. Jesse

Helms, as U.S. ambassador to the United Nations. Having just returned

from London, I can attest his appointment is seen as a direct and

offensive spit in the eye throughout Europe.

 

Bolton is infamous for deriding the U.N. " There is no United Nations, "

he once proclaimed, arguing that the world depends on the United

States to lead. Bolton stands with Republicans in Congress who, he

said, " not only do not care about losing the General Assembly vote but

actually see it as a 'make my day' outcome. "

 

But beneath this bravado, Bush is presiding over a precipitous erosion

of America's strength. The United States is the world's largest

debtor. Despite the continuing decline of the dollar's value in

Europe, the United States ran a record global deficit of more than

$600 billion last year. We will have to borrow nearly $2 billion a day

from abroad. Under Clinton, during the high-tech boom, the United

States could attract private and corporate investment in the real

economy. Under Bush, real investment from abroad has dried up.

Instead, a growing percentage of our foreign debt is financed by

central banks, particularly China and Japan.

 

Essentially, the leaders of these countries are choosing to keep the

value of their currencies low, while they take our jobs and lend us

the money to import the products that we used to make. Last month, the

textile imports from China soared over 500 percent, as prior trade

limits expired by law. China is becoming the world's manufacturing

center. We're already the world's leading credit card consumer.

 

Bush seems intent on running up this debt and sending the bill to our

children, who will be forced to devote a significant portion of their

lives working to pay interest to our Chinese and Japanese creditors.

 

We are now very dependent on the decisions of a handful of people at

the top of the Chinese Communist Party. If they chose to stop buying

our bonds, interest rates would soar and the economy would plummet.

 

Think that's far-fetched? Well, earlier this month, the South Korean

bankers -- who aren't in China's league as a U.S. creditor --

suggested that they might be losing their appetite for dollars.

Immediately the markets declined and interest rates spiked. The

Koreans rushed out a statement saying, in effect, that they weren't

serious and would stay with the dollar.

 

Bush may delight in stiffing our allies and scorning international

institutions, but we're paying a higher and higher price for it. Just

last week, China spurned U.S. appeals and authorized military assault

on Taiwan if that island moves toward independence. At the same time,

our European allies spurned U.S. appeals and are moving to start

selling advanced military weaponry to China.

 

Macho posturing -- as reflected in Bolton's nomination -- is good

politics at home. But the president is eroding our influence abroad

and ignoring our growing dependence on foreign creditors. The Chinese

bankers are being handed a chokehold over our economy. If they decide

to tighten the noose, the president will go from posturing to

prostrating himself to ask for mercy.