Kevin Colby: News, culture, political blog

America today is burdened with deeply rooted and unsustainable economic challenges. From credit debts and loss of manufacturing nationwide, to foreign nations buying our best companies and proping up the economy with loans, these issues impact every citizen. Here are the 16 major problems America faces today:

1. Wholesale sellout of core strategic assets to foreign acquirers: according to official figures, more than 16,613 American companies have been sold to foreign corporations in the last 30 years. Total foreign purchases total more than $1.5 trillion.

2. Subprime Fallout: more than one million home foreclosures have occurred in the first nine months of 2008 due to sub-prime lending. These negligent acts of predatory lending have taken houses from innocent homeowners and robbed the ability of deserving individuals to attain credit. The criminal behavior has also crippled America’s financial institutions. Banks such as IndyMac and Bear Sterns have collapsed while mortgage giants, Fannie Mae and Freddie Mac, seek a government bail-out to help shore-up $12 trillion in guaranteed home loans.

3. Housing Bubble Burst: America’s homes have hit their lowest value and sales rate while foreclosures soar. The median home value, as of June 2008, was $215,100, down 6.1 percent from the previous year. Home sales reached their lowest level in 10 years at an annual pace of 4.86 million, down 2.6 percent from June of 2007. Home values in 20 major metropolitan were down 15.8 percent while foreclosure filings rose 121 percent from the second quarter of 2007 to 2008.

4. Decline of vital industries through bankruptcy, foreign predatory competition, and foreign acquisition: examples include steel, publishing, textiles, machine tools, automobiles, electronics, movies and others

5. Inability to manufacture competitively: American manufacturers suffer a 22 percent structural cost disadvantage compared to overseas competitors through taxes, health and pension benefits, litigation, regulation, and unequal environmental protection

6. Overdependence on imports: $1 in $4 of US consumption of manufactured goods now goes immediately and directly to imports

7. Massive wealth transfer to foreign ownership: our trade deficit, at $711.6 billion in 2007, equal to almost $1.3 million per minute

8. Loss of job and career opportunities for people at all educational levels: 3 million high-paying manufacturing jobs lost over past 5 years

9. Insourcing of foreign manufacturers destroys our domestic industries, takes profits and taxes overseas, and provides only low-skill jobs for American workers: foreign manufacturers operating in the US now account for over 20 percent of our exports and manufacturing assets, and a large percentage of our employment

10. Dependence on foreign financing of vast majority of government debt: foreign countries now control more than 44 percent of our total federal deficit and finance nearly 100 percent of all new borrowings. Our competitors are now our bankers. China, Japan, Great Britain and Saudi Arabia account for more than $2.3 trillion in loans. Japan holds around $517.2 billion while China holds nearly $405.5 billion in loans.

11. Outsourcing key manufacturing, research, and design: unchecked offshore outsourcing benefits individual companies and shareholders but destroys entire industries and communities

12. Transition to services-oriented economy: high-paying goods-producing industries have lost net employment over the past 25 years while lower paying non-tradable service-providing employment has nearly doubled. Most new jobs are only in service positions in bars, resturants, hotels and hospitals

13. Lost scientific, engineering, technological prowess: in 2004, China and India graduated a combined 950,000 engineers versus 70,000 in the US. US ranks near the bottom of science/math proficiency

14. Record levels of personal and government debt: household liabilities at record levels, federal government adding record levels of debt each year financed mostly by foreign countries, trade deficits transferring unprecedented accelerating amounts of wealth to foreign hands each year. In 2005, the average U.S. savings rate was a negative 1%

15. Misleading commonly used economic statistics: misleading incomplete statistics like GDP, job creation, and productivity belie our crumbling economic infrastructure. In June 2007, Businessweek reported that 40% of the gains in manufacturing could be non-existent due to a miscalculation known as “phantom GDP.”

16. Proven failed trade policies and other legislation contributing to our demise continue unchallenged: destroying our industry and allowing our assets to be sold or taken from us

Click here to contact your Representative in Congress.

Information was obtained from economyincrisis.org