2016 | We assume that any altercation with an adversary like Russia or
China will not go nuclear. Any altercation will be conventional military
or settled economically. The United States has proved to China that it
is sensitive to casualties in a conventional confrontation. When China
spilled over the Yalu River in the Korean War, rather than suffer the
casualties, the United States retreated to the 38th parallel. In the Vietnam
War we could have prevailed by going above Hanoi. We didn't for fear that
China would come in.
military needs improving. We spent billions training Iraqi forces and
when confronted dropped their weapons and ran. We have been training Afghan
forces for fifteen years to no avail. First, there must be the will to
fight. The United States has more than 200,000 G.I.s dispersed around
the world with the conventional military taking over foreign policy. In
foreign policy, pivoting to the East by deploying 2,500 Marines into Australia
is ridiculous. Drone killing creates enemies rather than eliminating enemies.
Many U.S. commitments have become unrealistic. Congress is not about to
have G.I.s killed defending Taiwan and the Senkaku Islands.
continues to play the game of "free trade." As JFK's Profiles
in Courage, Henry Clay observed in 1836 on the floor of the U.S. Senate
on free trade"
It doesn't exist. It never will exist."
The Founding Fathers took over our economy the first hundred years with
Congress enacting the Tariff Act of 1787 - two years before the Constitution.
Protectionism worked so well that Edmund Morris writes in Theodore
Rex (pg. 20-21) that "The first year of the New Century found
the United States worth $25 billion more than her nearest rival Great
Britain with a gross national product more than twice that of Germany
and Russia." With globalization, protectionism is necessary. The
Congress and Corporate America developed the economy in the 1900's. But
now, with globalization, Corporate America is out fending for itself and
the Congress only fundraises. In 1950, the United States determined that
it must have the materiel necessary for a conventional military engagement.
We couldn't wait on imports to defend ourselves. Congress enacted the
1950 Defense Productions Act. We must follow the Act in globalization.
Congress has to make a list of necessary materiel like steel, motor vehicles,
computers, and machine tools. Ronald Reagan, protected these items in
1984 and it is absolutely necessary to protect them in globalization.
Next, we have to make it profitable for Corporate America to produce those
items vital to a strong economy in the U.S. A successful entrepreneur
has to pay the 35 percent corporate tax and a 17 percent value-added tax
(VAT) when his product reaches China. A competitor can produce the same
product in China, import it tax free into the U.S. and put the entrepreneur
out of business. 164 countries compete in globalization with a value added
tax. The value added is merely the cost of doing business, such as the
electric bill or delivery boy's salary. The VAT has no loopholes and is
self-enforcing. You either pass it on or absorb it. Replacing the Corporate
Tax with a VAT immediately releases $2 trillion in offshore profits for
Corporate America to repatriate tax free and create millions of jobs.
Last year's 35% Corporate Tax raised $343 billion. A 2015 VAT would have
raised $2.3 trillion. Now we can stop the borrowing and phase out the
Company has just announce a $1.6 billion plant in Mexico. The United States
acts as policemen of the world as its research, technology, production,
jobs, payrolls - its economy is offshored. Today, the challenge is not
just for Congress to perform its Constitutional duty by taking charge
of the economy. Congress must make it profitable for Corporate America
to produce in the United States.
after Tiananmen Square, the U.S. obtained a resolution in the United Nations
to investigate China's human rights. China in turn used our Good Neighbor
Policy by going to its economic friends in Africa and the Pacific and
there's never been a hearing on the Resolution. A strong economy is vital
to foreign policy.
Senator Fritz Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of Making Government Work (University of South Carolina Press, 2008).
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