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) -- The Commerce Department is expected to report on Friday that the deficit on international trade in goods and services was $45.0 billion in November, up slightly from $43.5 billion in October.

This trade deficit is the most significant barrier to jobs creation and growth in the U.S. economy. It's even more formidable than the federal budget deficit, because its effects are more enduring.

The economic recovery is slow, because the U.S. economy suffers from too little demand for what Americans make. Americans are spending again -- the process of winding down consumer debt that followed the Great Recession ended in April. However, every dollar that goes abroad to purchase oil or Chinese consumer goods, and does not return to purchase U.S. exports, is lost domestic demand that could be creating American jobs.

Jobs Creation

Oil and Chinese imports account for virtually the entire trade gap. The failure of the Bush and Obama administrations to develop abundant domestic oil and gas resources, and address subsidized Chinese imports are major barriers to reducing unemployment.

The economy added only 200,000 jobs in December; whereas, 360,000 jobs must be added each month for the next 36 months to bring unemployment down to 6 %. With federal and state government cutting payrolls, the private sector must add about 380,000 per month to accomplish this goal.

Too many dollars spent by Americans go abroad to purchase Middle East oil and Chinese consumer goods that do not return to buy U.S. exports. This leaves U.S. businesses with too little demand to justify new investments and hiring, too many Americans jobless and wages stagnant, and state and municipal governments with chronic budget woes.

Economic Growth

For 2011, GDP growth averaged about 2%, but 3% is needed just to keep up with productivity and labor force growth and keep unemployment from rising. Fourth-quarter growth was about 3% --compensating for more sluggish progress earlier in the year -- but overall economists expect the pace to again slow to 2% to 2.5% in 2012.

In 2011, consumer spending, business investment and auto sales added significantly to demand and growth, and exports did better too; however, higher prices for oil and subsidized Chinese manufactures into U.S. markets pushed up the trade deficit and substantially offset those positive trends. Now conditions in Europe and rising consumer debt will curb demand at least through the spring and summer.

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 United States 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. In addition, faced with difficulties in its housing and equity markets, and troubled banks, it is boosting tariffs and putting up new barriers to the sale of U.S. goods in the Middle Kingdom.

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 United States should impose a tax on dollar-yuan conversions in an amount equal to China's currency market intervention. That would neutralize China's currency subsidies that steal U.S. factories and jobs. That amount of the tax would be in Beijing's hands -- if it reduced or eliminated currency market intervention, the tax would go down or disappear. The tax 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 $550 billion and create at least 5 million jobs.
Professor Peter Morici, of the Robert H. Smith School of Business at the University of Maryland, is a recognized expert on economic policy and international economics. Prior to joining the university, he served as director of the Office of Economics at the U.S. International Trade Commission. He is the author of 18 books and monographs and has published widely in leading public policy and business journals, including the Harvard Business Review and Foreign Policy. Morici has lectured and offered executive programs at more than 100 institutions, including Columbia University, the Harvard Business School and Oxford University. His views are frequently featured on CNN, CBS, BBC, FOX, ABC, CNBC, NPR, NPB and national broadcast networks around the world.