| You are 100% correct. The so-called economic experts seem to be failing basic accounting when it comes to determining if free trade and off shoring actually is helping American and its citizens.
The fact is there is a finite amount of dollars in the world. We already have a $1 trillion trade deficit, this means we are sending $1 trillion dollars over seas more than we are taking in. This means $1 trillion less ciculating in our economy. Now we are taking jobs and sending them over seas, which means we have to track a new deficit, a labor deficit. This is a monetary value not currently being measured, but if we look at the rough numbers that the average programmer makes $50-60,000 out of school, while the average Indian replacement makes $5-6,000 for the same job. You can see a vast amount of money be sent away. In this study they claim roughly 250,000 IT jobs will be created in Indian with off shoring, that alone is an increase of $1.25 billion over current totals. That also ignores lost tax revenue, social security contributions, and health care costs, which would total many millions more.
As more and more money leaves the U.S. for third world countries we only will decrease our poverty levels while not aiding foreign countries economic levels in any meaningful ways.
Liberal free traders claim moving U.S. doallars over seas will raise third world citizens out of poverty. That claim simply is not true. Take India which has a billion people, 4 times that of the U.S. or what about China, same thing. Do you really think we can move enough U.S. dollars to these countries to make them economic equals to us or the EU? No, its impossible, there just isn't enough money to go around. All you succeed in doing is dragging the U.S. middle-class down.
Pro-offshoring folks argue that bringing U.S. employers to foriegn countries opens up new markets for U.S. companies. Again, this is simply not true. Lets look at the companies who are the primary source of offshoring, telecoms like SBC, Verizon, Qwest all of which are companies who conduct business only in the United States. What about other fields, account for instance H&R block. I can't imagine there is a whole lot of Indians that need help filling out their form 1040, especially since they don't pay U.S. taxes.
World trade is a good thing only when its balanced. Right now our trade policies are so out of skew we are killing our selves. We chould really be looking at china as an example of good world trade policy. Lets give local companies tax breaks and subsidies. Open these tax breaks and subsidies to any company across the world who chooses to produce the products they sell to the U.S. in the U.S. Lets encourage more math and science in schools by insuraning our young will have jobs in those sectors in the future, by protecting our job base now. We need policies that encourage homeshoring and discourage offshoring. |
