The Shell Game

''Treat each federal dollar as if it was hard-earned;
it was, by a taxpayer.''
--Donald Rumsfeld
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More bad economic news,

''The trade deficit shot up in March to the highest level in six months, driven by a big jump in imported oil. The politically sensitive deficit with China shrank as US exports to that country hit an all-time high (''U.S. Trade Deficit Higher Than Expected.'')''

The deficit with China may have ''shrunk,'' but it is still bloated, running 20.4% higher than a year ago.

''The Commerce Department reported that the gap between what the United States imports and what it sells to the rest of the world rose to $US63.9 billion ($A77.32 billion) in March, up 10.4 per cent from the February level,'' a ''bigger-than-expected'' deterioration.''

Note the $63.9 deficit figure is for the month of March 07 alone.

''So far this year, the trade deficit is running at an annual rate of $US722.6 billion, slightly below last year's all-time record of $US765.3 billion. The deficit has set new records for five consecutive years.''

Those five consecutive years parallel GWB's dynastic (though far-from dynamic) presidency.

''Critics of President George W. Bush's trade policies contend that the administration has not done enough to protect American workers from unfair foreign competition from low-wage countries such as China.''

Yup, we're even running a deficit with Canada (''The deficit with Canada, America's biggest trading partner, rose by 21.7 per cent to $US5.7 billion in March.''), which should say something.

In tandem with this magnificent trade deficit, the Congress is passing legislation that aids the exit of U.S. dollars to overseas targets (''House Rejects Iraq Pullout Bill.'')

Congress is authorizing $42.8 billion to buy equipment for the Iraq and Afghanistan security forces through August.

And in what I'm sure they saw as a tough stance, it will ''take a summertime vote by Congress to free an additional $52.8 billion, the money needed to cover costs through Sept. 30.'' Which they will grudgingly, with much teeth-gnashing--though dutifully--release from our wallets, lest they be billed yellow-dog traitors, a title which doesn't square well with ''re-election.''

In other words, a mere $95.6 billion dollars to take this sorry slog another 4 1/2 months.

Surely this should be tallied into the deficit trade figures. This money is leaving America and never coming back. Thank you, taxpayers, for your unbidden generosity.

And in yet another odd juxtaposition,

''The Pentagon acknowledged this week that Army National Guard units had only 56 percent of their required equipment. . . Defense Secretary Robert Gates said the Bush administration is asking Congress for $22 billion for the Army National Guard over the next five years, which would take Guard equipment levels up to 76 percent (''Governors Worry About Depleted National Guard.'')

So, the Iraq/Afghanistan police forces get $42.8 billion for 2 1/2 months worth of equipment and training, taking financial priority over U.S. Army National Guard, who may get half that amount to cover five years of needs, to bring them up to partial speed. And all these figures are taken with the tacit assumption that conditions will not worsen. Well, why spend money on the N.G.--we already have their hearts and minds.

"Time's running out, because the longer we wait the more strain we're going to put on the military," Bush said.

Surely GWB understands that Congress, not the military, is the legislative branch of this government. The military is down the organizational chart, and Congress is the voice of the people.

The American taxpayer overwhelmingly is sending all their tax dollars into a bottomless sandpit thanks to GWB and his corporate-patron cabinet. The wishes and desires of the average hardworking American is ignored by these elitists.

Handsomely

A strong nation, like a strong person, can afford to be gentle, firm, thoughtful, and restrained.
It can afford to extend a helping hand to others.
It's a weak nation, like a weak person, that must behave with bluster
and boasting and rashness and other signs of insecurity
--Jimmy Carter

We hold the distinction of being the only nation
that is goin' to the poorhouse in an automobile
--Will Rogers
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The Federal Reserve Bank of Dallas President Richard Fisher recently said ''the U.S. economy has been growing handsomely.'' How does one quantify that word, handsomely.

I reckon the Chinese consider it to be one trillion plus in foreign reserves mostly held in dollars.

At the same time, the Wall Street Journal reported, ''The dollar fell to a two-year low against the euro on worries that U.S. complaints over trade with China might cause the Chinese government to retaliate'' (''The Dollar Drops Sharply on Euro,'' Dan Molinski, 4/11/07, C.12.'') Since that report, the euro has broken 1.36 [from 1.3457], despite reassurances in the intervening two-weeks that it was remaining ''well-below'' that mark.

The above article also reported,

'''The U.S.-China issue seems to be the factor weighing on the dollar,' said David Watt, senior currency strategist at RBC Capital Markets in Toronto, noting that there were no major U.S. or European data that otherwise might have explained the dollar's move lower.''

''Currency analysts at Brown Brothers Harriman, explaining the dollar's decline against the euro, said that 'the fear is that China will retaliate to U.S. action and sell U.S. Treasurys or simply not buy more.'''

The dollar was sent even lower against the euro today by a ''slew of negative U.S. reports on housing, consumer confidence and manufacturing activity, all of which shined a spotlight on an overall weak economy'' (''Dollar Drops on Home Sales, Consumer Confidence Data,'' WSJ, 4/24/07.)

The euro reached a fresh two-year high of $1.3640, closing in its all-time high of $1.3670 back in December 2004. Influencing factors included soft manufacturing reports and ''poor existing-home sales, which took their biggest tumble in 18 years in March, falling 8.4% versus an expected slip of only 4.0%.'' But it's just a tumble, I guess. Not just headlines, but sub-reports were consistently ''dollar-negative''.

Ranger's casual take on the subject: The Chinese continue to finance the U.S. deficit lifestyle and our phony elective wars, but the Bush administration gets its pants in a wad over Chinese exports of glossy paper. It seems that glossy paper is worth alienating our sister economy, the Chinese.

The U.S. economy is a house of cards based upon Chinese goodwill and economic policy. The U.S. is so far behind the power curve that we will never be in the driver's seat again, unless the U.S. adopts sound financial policies--from the personal to the federal level.

We have no FDR or Jimmy Carter telling us that we must rein in our profligate resource consumption. Victory gardens and thermostat reduction are for chumps. Unfortunately, our national leadership is on board with the conservative fundamentalist monetary credo, which basically assures the faithful that God wants you to be flush.

Deficit lifestyles do not benefit the individual nor the country. We better get a grip before it is too late.

A good start would be to eliminate ''emergency spending'' on a non-emergency, phony war.