Is America Falling?

March 20, 2008
By Andrew Winkelmann, Rockford, MI

Personally I think America is falling and that China will become the next big powerhouse of the world. America is in a really bad situation right now. For one thing thousands of jobs are leaving the US to go to primarily Mexico and China. Why you may ask? It is because in China, Mexico, and other foreign countries there are a lot more workers willing to work for a much lower salary than in the US. Why would they be willing to work for so little you might be asking yourself? Well it’s because China and India and many other counties have a very high labor surplus so in China finding a job is hard and many people are below the international poverty line.

When companies ship the jobs to foreign countries and have people working for less to make the goods it is a lot cheaper than making it in the US. So why aren’t all the jobs being shipped to foreign countries? Well primarily for two reasons one is the tariffs we put on imported goods. Tariffs make it so when a foreign country ships goods to the US they have to pay money to get it in the borders. That helps keep jobs in the US instead of being shipped. When NAFTA was established that eliminated tariffs on goods from Mexico and Canada. NAFTA stands for North America Free Trade Association. There are many agreements similar to NAFTA in other parts of the world such as the European Union. Generally Democrats are against tariffs and also NAFTA and Republicans are for it. I’m not saying that it’s true for everyone it’s just a general idea.

The other main reason is that the increased gas prices means that it costs the companies more to ship the goods to the US. One monster of a ship is the OOCL Shenzhen which is the biggest cargo ship in the world which can carry 219.3 million pounds of cargo and fuel. The vessel uses more than 10 tons of fuel per hour of travel, as put by Kids Discover in their boats issue. Now wait a minute, just stop and think, can you imagine how much that would cost. With gas prices the way they are can you imagine how much it would cost to go on a 6-10 hour journey. You would use more than 60-100 tons of fuel. That is crazy, so you can imagine what kind of impact that puts on the cost of imported goods.

Another major reason that I think America is falling is our economy is slowed down so much. We have to pay around $3 a gallon for gas. Now that means that we have to use a big chunk of the money we make to pay for gas. Thus making us have less money to spend on consumer goods. The gas prices are raising the prices of imported goods so we have to spend even more money on goods then normal giving us even less money to spend. We all know what happens when people stop buying as much consumer goods. It really hurts and slows our economy down. While our economy is slowing China and other countries economy are growing so much. While we have to pay so much for goods from other countries, entrepreneurs from those countries are becoming rich and prosperous.

The third reason is the inflation rate is growing and some people believe it will top 20% in the next few years. The euro is becoming much more valuable than the dollar bill is. In a music video the rapper Jay-Z was holding a handful of euros instead of the stack of 100 dollar bills. The dollar bill’s inflation rate is worse than the euros but not nearly as bad as Zimbabwe’s where a man bought a dollar bill on the black market for about 2 million Zimbabwean dollars. On March 9, 2008 the dollar hit a new all time low at 1.5356. That means that one euro is worth about $1.54. It’s because as the government prints of more dollar bills the bills become worth less. So if we to print off 900 billion dollars this year the dollar bill would be worth a lot less. That’s because dollar bills would be easier to find and get and there would be more of them so the value of the dollar drops. The inflation rate of the USA was about 2.7% in 2007. Imagine the inflation rate 10 times higher. That’s what some people are predicting will happen. One reason why is because the government is printing money to help pay off foreign debt. We owe 12.25 trillion dollars as of June 30, 2007. 12.25 trillion dollars, wow that is a lot! Can you imagine how hard it is going to be to pay off that debt? Do you know who will have to pay for a huge chunk of it.? Us through taxes we will have to pay it off. The world debt for then was about 54 trillion. We are around 2/9th of the world’s total debt. That’s like .22222...%. We owe more than any other country. In fact we owe about 2 trillion dollars more than the UK which has the second largest debt. If we all pay $100 a year to get out of debt, with about 300 million people in the USA, we will pay 300 billion dollars a year it will take around 40 years. That is if the population stays the same and everyone no matter what age pays $100 then it will take us 40 years! Everyone single person, every single person would have to pay and it would still take 40 years!

America is in a bad shape. It will never be the same powerhouse it was just recently. I think America is falling and China will take over. Do you?

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