Outsourcing the Deficit

By Gus Tyler

Published July 14, 2006, issue of July 14, 2006.
  • Print
  • Share Share

At first blush, it is a mystery. We’re talking about the tax receipts of the federal government; they are projected to total about $250 billion more this year than they did last year and, as a result, will bring down the budgetary deficit by about $150 billion more than was projected just six months ago.

Where is this money coming from? It is not based on any change in the Bush policy of rewarding the richest in the land with tax cuts — cuts that run into the billions of dollars and that, projected over a 10-year period, will cost Uncle Sam trillions. The flood of revenue into the federal coffers comes primarily not from individuals but from corporations. Federal income from corporations has tripled since 2003. Simultaneously, there has been an upward leap in taxes from stock market profits and executive bonuses.

In our lifetime, a profound metamorphosis has taken place in the corporate world. It has been embodied in the rise of global corporations and, subsequently, in the mergers of such corporations into mega-corporations. The driving force behind such global mergers is the search for cheap labor.

Let’s take examples drawn from two different kinds of American industry — first from the labor-intensive apparel industry, with its historically low wages, and then from the capital-intensive auto industry.

Starting shortly after World War II, American apparel producers outsourced labor to lands where workers were paid in pennies for doing the work that American apparel workers performed for dollars. Today, apparel trades factories, once the largest factory employer in this country, are virtually nonexistent.

Not many years later, the same process started among auto companies. American autoworkers, who typically earn about $50,000 a year, including fringe benefits, are now being displaced by workers in Third World countries who earn about $5,000 a year. American auto corporations, to strengthen their position in world markets, began merging with auto companies of other lands to form global mega-firms that realize mega-profits.

The incredible income realized by such firms provides the Internal Revenue Service a treasure-trove. The question is: Is it worth it — in terms of lost jobs and incomes of American workers and those who depend for survival on those workers’ pay?

The captains of industry seem to think so. Whatever happens to the rest of us, they’ll make out fine. Of them the psalmist might have written, “Yea, they ride through the valley of death but they do not fear, for they are the meanest SOBs in the valley.”






Find us on Facebook!
  • "Despite the great pain and sadness surrounding a captured soldier, this should not shape the face of this particular conflict – not in making concessions and not in negotiations, not in sobering assessments of this operation’s achievements or the need to either retreat or move forward." Do you agree?
  • Why genocide is always wrong, period. And the fact that some are talking about it shows just how much damage the war in Gaza has already done.
  • Construction workers found a 75-year-old deli sign behind a closing Harlem bodega earlier this month. Should it be preserved?
  • "The painful irony in Israel’s current dilemma is that it has been here before." Read J.J. Goldberg's latest analysis of the conflict:
  • Law professor Dan Markel waited a shocking 19 minutes for an ambulance as he lay dying after being ambushed in his driveway. Read the stunning 911 transcript as neighbor pleaded for help.
  • Happy birthday to the Boy Who Lived! July 31 marks the day that Harry Potter — and his creator, J.K. Rowling — first entered the world. Harry is a loyal Gryffindorian, a matchless wizard, a native Parseltongue speaker, and…a Jew?
  • "Orwell would side with Israel for building a flourishing democracy, rather than Hamas, which imposed a floundering dictatorship. He would applaud the IDF, which warns civilians before bombing them in a justified war, not Hamas terrorists who cower behind their own civilians, target neighboring civilians, and planned to swarm civilian settlements on the Jewish New Year." Read Gil Troy's response to Daniel May's opinion piece:
  • "My dear Penelope, when you accuse Israel of committing 'genocide,' do you actually know what you are talking about?"
  • What's for #Shabbat dinner? Try Molly Yeh's coconut quinoa with dates and nuts. Recipe here:
  • Can animals suffer from PTSD?
  • Is anti-Zionism the new anti-Semitism?
  • "I thought I was the only Jew on a Harley Davidson, but I was wrong." — Gil Paul, member of the Hillel's Angels. http://jd.fo/g4cjH
  • “This is a dangerous region, even for people who don’t live there and say, merely express the mildest of concern about the humanitarian tragedy of civilians who have nothing to do with the warring factions, only to catch a rash of *** (bleeped) from everyone who went to your bar mitzvah! Statute of limitations! Look, a $50 savings bond does not buy you a lifetime of criticism.”
  • That sound you hear? That's your childhood going up in smoke.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.