Disembowelled US - 3 more years of Dubya

The US December 2005 Trade Report tells you what you need to know. Imports of foreign goods and services ($177.2 billion) were 59% greater than exports ($111.5 billion).

Taking goods alone in the December trade gap, the disparity between imports ($149.6 billion) and exports ($79.0 billion) was even larger.

With imported goods 89% greater than goods exports, exports could grow at twice the rate of imports and still the deficit will be unchanged.

So it is unlikely that the USA can, or will, export its way out of its trade deficit.

The other problem is the disembowelling of America … the smokestacks are going … see Ford … see GM … Manufacturing capacity and jobs have inexorably moved offshore in the past 2 decades. Put simply, the USA cannot look to a an export led turnaround.

Steel, autos, textiles, the loss of the competitive dynamic in all but aerospace and the defence industries (and that is getting harder with Airbus and EU competition) makes it all but impossible for the US to recapture its once leading market share as an industrial powerhouse.

Add to this gloomy scene the equity extraction from residential property, in excess of $600 billion in 2005 alone.