NEW YORK (TheStreet) -- Tuesday, the Commerce Department is expected to report the April deficit on international trade in goods and services was $41.2 billion, up from $24.9 billion when the economic recovery began. The Obama Administration's ill-conceived energy policies and appeasement of China and Japan are responsible for this jump in the trade gap and the slow pace of economic recovery.
Household spending has recovered but too many consumer dollars pay for imported oil and consumer goods and cars from China and Japan. Whereas consumer spending is up 16%, the trade gap has jumped 36%.
Businesses, consequently, remain pessimistic about demand in the U.S. market and reluctant to invest. With the majority of U.S. businesses subject to higher personal, as opposed to corporate rates, more onerous and costly regulations and paying more for employee health care, they remain reluctant to hire and continue to offshore jobs.
Sequestration only subtracts about $42 billion from actual government spending this fiscal year, and its impact pales by comparison to the $225 billion increase in the trade deficit and the $150 billion January tax jolt.Fracking in the Lower 48 has not delivered enough new oil, and a full push on U.S. potential in the Gulf, off the Atlantic and Pacific coasts and in Alaska could cut import dependence in half. Shifting federal subsidies from electric cars, wind and solar to more fuel efficient internal combustion engines, plug-in hybrid vehicles and liquefied natural gas in rail and trucking could slice imports by another 25%. Lower natural gas prices substantially improve the international competitiveness of industries like petrochemicals, fertilizers, plastics, and primary metals. However, the Department of Energy's push to boost liquefied gas exports will handicap growth and create millions fewer jobs than keeping the gas at home for manufacturing and alternatives to diesel in transportation.
China systematically undervalues its currency against the dollar to keep its goods cheap in the U.S. China steals technology, subsidizes exports and imposes high tariffs on imports, while effectively distracting the Obama Administration from these commercial issues with measured intransience on cyber-security and nuclear issues in North Korea.
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