NEW YORK ( TheStreet) -- Tuesday, the Commerce Department reported the deficit on international trade in goods and services was $42 billion in July, up slightly from $41.9 billion in June.
Imported oil and subsidized imports from China account for nearly the entire $500 billion annual trade gap and pose the most significant barriers to robust growth and jobs creation.
The trade deficit on oil moderated a bit as economic activity slowed and prices fell from earlier in the year, but the trade gap with China continues to increase and now exceeds $350 billion on an annual basis.
The economic recovery began five months after Barack Obama took office, and GDP growth has averaged 2.2%. In October 2009, unemployment peaked at 10%, but has fallen to 8.1% entirely because fewer Americans are seeking work.Ronald Reagan inherited a similarly troubled economy with unemployment cresting at 10.8% early in his presidency. When he sought reelection, the economy was growing at 6.3%, unemployment was 7.3% and a rising percentage of Americans were seeking work. The U.S. economy suffers from too little demand. Consumers are spending, but too many dollars go abroad to pay for Middle East oil and Chinese goods that do not return to buy U.S. exports. Businesses remain pessimistic and don't hire. Reagan encouraged the development of natural resources and endured much criticism from environmentalists and academics. Whereas Obama has talked repeatedly about developing the full range of energy resources, but has bent to their pressure and imposed counterproductive limits on oil production in the Gulf, off the Pacific and Atlantic Coasts, and Alaska. Merely replacing domestic oil with imports does little to improve air quality or curb CO2 emissions. These policies are premised on faulty assumptions about the immediate potential of electric cars and unconventional energy sources -- the failures of the government subsidized Chevy Volt and Solyndra are two of many examples of failed government investments in alternative energy projects premised more on home than solid business plans. In combination, curbs on domestic conventional oil production and squandered resources on alternative technologies not yet ready for commercial application make the U.S. much more dependent than necessary on imported oil and destroy jobs by the millions.