The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- Thursday, the Commerce Department is expected to report the deficit on international trade in goods and services was $48 billion in June. The trade deficit is the most significant barrier to jobs creation and growth in the U.S. economy. Simply, the U.S. economy suffers from too little demand for what Americans make. Every dollar that goes abroad to purchase oil or Chinese consumer goods that does not return to purchase exports is lost purchasing power that could be creating jobs. Halving the nearly $600 billion annual trade deficit would create at least 5 million jobs.
Administration-imposed regulatory limits on conventional oil and gas development are premised on false assumptions about the immediate potential of electric cars and alternative energy sources, such as solar panels and windmills. In combination, administration energy policies are pushing up the cost of driving, making the U.S. even more dependent on imported oil and overseas creditors to pay for it, and impeding growth and jobs creation. Oil imports could be cut in half by boosting U.S. petroleum production by 4 million barrels a day, and cutting gasoline consumption by 10% through better use of conventional internal combustion engines and fleet use of natural gas in major cities. To keep Chinese products artificially inexpensive on U.S. store shelves, Beijing undervalues the yuan by 40%. It accomplishes this by printing yuan and selling those for dollars and other currencies in foreign exchange markets. Presidents Bush and Obama have sought to alter Chinese policies through negotiations, but Beijing offers only token gestures and cultivates political support among U.S. multinationals producing in China and large banks seeking business there. The U.S. should impose a tax on dollar-yuan conversions in an amount equal to China's currency market intervention divided by its exports -- about 35%. That would neutralize the currency subsidies that steal U.S. factories and jobs. It would not be protectionism; rather, in the face of virulent Chinese currency manipulation and mercantilism, it would be self-defense. Cutting the trade deficit in half, through domestic energy development and conservation, and offsetting Chinese exchange rate subsidies would increase GDP by about $600 billion and create at least 5 million jobs.
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