The Well is Dry
By: Paul J. Bennett
I can remember a time when I was reasonably affluent, drove high end luxury automobiles, and had no financial worries. Today, I make less money than I did many years ago; drive older vehicles sorely in need of various repairs and maintenance that I can’t afford, and I’m in a constant struggle and under a great deal of stress, trying to keep a multitude of creditors at bay. All of the various levels of governments from local on up to federal have constantly increased all of the various taxes; they have created all kinds of new taxes, and have added all kinds of “fees” (more taxes) than ever before. Inflation is rampant, and the cost of living continues to soar. Many of my friends and neighbors are now living at well below the poverty line established by the federal government. Don’t put your hands in our pockets anymore. The well is dry!
I once purchased goods that were made in America. Rarely would I consider purchasing anything manufactured overseas. Today that has all changed. One would be hard pressed to find anything in my home that was made here in America. It’s not that I don’t want to purchase goods made here, it’s simply a matter of being able to find anything in the stores that is American made. The end result is that there is less money being generated in our country, but we are paying for items where the profits go overseas, and a huge portion of the purchase price involves all kinds of hidden, built-in taxes plus sales tax on top of that – all going to various levels of government. In exchange for my money, I receive a cheap, overpriced piece of crap made in a third world country. I can’t do this anymore. The well is dry!
One would think that that we as Americans could at least be confident in our food supply but once again, all levels of government in our country have found ways to tax and regulate U.S. farmers, apply a multitude of “fees” for new government “services,” and thus increase the cost to the small farmer, which in turn raises the price of food WE have to pay. Yes folks – we are paying yet more taxes. However in the meantime, we are importing meats, fish, grains, fruits, and vegetables from overseas countries (China being one of the big ones) in addition to tons of processed foods. Many of these foods contain poison and other contaminants, foreign objects, etc (no quality control to speak of). This means U.S. small farmers are being driven out of business, we are eating crap food, the profits are leaving this country and going overseas, AND we are paying more fees and taxes on top of that! Sorry. I can’t do it anymore. The well is dry!
The government keeps taking my money to support illegal aliens! What? What part of the word “illegal” does the government NOT understand! Why should they have ANY rights or entitlements to MY money? Can’t we just put them in irons and force them into hard labor, producing food for America long enough to pay the expenses of shipping them home – AND – THEN give them the boot??? Sorry Mr, President (and every other politician right on down to the local town selectmen) I can’t do this anymore. THE WELL IS DRY!!!!!!
Everyone knows the conventional explanations as to why we find ourselves in such a pickle. Yet not very many folks know what transpired over a number of years that largely put the U.S. manufacturing base into turmoil and eventually forced many companies to close up shop and/or move their operations outside of this country. I’ll attempt to shed a bit of light on the subject and suggest the blame for our woes sits upon the shoulders of our politicians (all parties) presiding in office back in the 70’s and 80’s.
The U.S. merchant marine industry was once the strongest in the world, with more merchant ships, moving more freight tonnage than any other maritime country on the planet. U.S. merchant ships were always the safest and most dependable, being staffed with USCG licensed officers and crew.
Most U.S. flag merchant ships came under the direction of the U.S. Maritime Administration (MARAD) even though they were independently owned by various U.S. corporations. This was because any ship under the MARAD program was subsidized by the federal government. The subsidy allowed US ship owners to have U.S. flag ships built in U.S ship yards and to operate these ships competitively against all of the foreign flag fleets. In effect, this subsidy leveled the playing field such that any shipper in his/her right mind would prefer to ship their freight on a U.S. flag vessel because the cost was basically the same, but the freight was in better hands on board a much more reliable and safer ship.
The reason for the subsidy from MARAD was not so much for business reasons. Ship owners were not required to enter the MARAD program. The MARAD subsidy program was in place to guarantee that the merchant ships under the subsidy would be built to very specific MARAD design standards in various ship classes (meeting military needs) and would be available to the US government under command of the US Navy in a national crisis where such merchant ships might be needed.
Politicians decided that all of the money being poured into the MARAD merchant ship subsidy program would be better served if used for all their pet pork projects in their respective legislative districts that they represented. They took the money away for their own selfish reasons, and doomed the U.S. national economy to a slow death, and also jeopardized our national security in several ways.
Those of us living along the seacoast of the United States are well aware of just how large most commercial, ocean-going ships are and how much steel is involved in their construction. Along with that comes all of the machinery from main propulsion systems, electrical power generation, auxiliary machinery, freezers, refrigeration, etc. Large, ocean-going ships are essentially small cities.
With the loss of the MARAD subsidies, no more new ships were being built in the USA. The foreign ship yards were picking up all the new ship construction contracts. This also applies to ship repair and dry-docking. American ship yards slowly went out of business and had to lay off all of its workers. Much of the shipyard equipment and machinery was auctioned off to foreign shipyards for pennies on the dollar. Whatever wasn’t sold, just sat and rusted into a state beyond refurbishment or repair.
U.S. flag ships already built and in use loss their MARAD operating subsidies and had to raise shipping rates far above rates charged by foreign flag vessels (heavily subsidized by their respective countries). The amount of freight being shipped on board U.S. vessels began to drop substantially to the point where shipping companies were operating in the red, while trying to maintain regular routes and shipping schedules. Eventually, these ships were put into the MARAD “mothball fleet” in the James River (Virginia) where they became obsolete, rusting hulks. The U.S. shipping companies either went out of business or became much smaller versions of what they once were. Most of the ships put into “mothballs” have been scrapped after becoming rusted out hulks and obsolete.
All of this took place in the 1970’s into the early 1980’s. I watched this all take place and predicted what would happen next. It wasn’t difficult.
With no further orders being placed for American made steel; the big steel mills in Bethlehem & Pittsburgh, PA, (along with big mills in Gary, Indiana and other such steel producing parts of the US) slowly started to die. At first the mills reduced production and started to lay off workers. As fewer and fewer orders came in, more people lost their jobs. Eventually, there was not enough steel being produced to justify the cost to continue operating and the mills simply shut down all together.
The effect upon our country was staggering and wide spread, but nobody in Washington realized what was really taking place. They were all asleep at the switch.
Our railroads began to feel the pinch. They were no longer transporting steel and iron ore in trains that were miles long like they did in the past. The maintenance and labor costs to run a railroad remained the same, but there was less money being generated to the point where there was not enough to maintain overhead. Once again, railroads (like merchant shipping, shipyards, and steel mills) started to lay off workers, stopped performing much needed repairs and maintenance to railways and rolling stock, and eventually many railroads failed altogether.
With reduced or no further need for iron ore and other raw products used in steel production or coal for firing the steel mills, many of Americas large mines simply shut down – more jobs lost.
Ships use miles and miles of electrical cables, piping of all kinds, a myriad of machinery, switch gear, etc. – just to produce one ship. You may have guessed already that hundreds of machinery manufacturers and material (electrical cable, etc.) producers in this country all went “belly up.”
I could continue to go on and on about various industries that shut down because of their interdependency on all of the above listed producers, but by now I believe you get the idea.
What were the consequences beyond the obvious ones I’ve already cited? The resulting failures of America’s mightiest industrial base meant a serious reduction in corporate taxes and fees that the various levels of government enjoyed in years past. There was also a big loss of government income tax revenue due to so many Americans losing their very good paying jobs.
Surviving American manufacturers, including a large portion of the automobile industry scrambled to compete by importing cheaper parts (and complete automobiles) from overseas. They also started to shut down manufacturing plants and started moving them outside the U.S. for cheaper labor and lower taxes. You guessed it – more job and revenue losses for the USA.
Less of our money was circulating among U.S. companies and into the hands of U.S. workers. Most of the profits being generated from sales in the U.S. began going to foreign companies and increased the industrial might of other countries. This only worsened as time went on, right to the present poor economy we find ourselves in.
It gets worse folks! All of the various levels of U.S. government went into a panic with the huge losses of revenue and simply began reaching deeper and deeper into our individual pockets with increased and newly generated forms of taxes. All kinds of value-added fees came about, and we started seeing taxes on other taxes in various forms. This raised the cost of goods, but all we were left with were low paying service and sales jobs. We started paying more and getting less for our money, while making less money than we made in the past. For many of us, this lowered our standard of living. The government cannot be allowed to continue in this fashion. THE WELL IS DRY!!!!!
All of these things I’ve discussed happened slowly. There was a “domino effect” that took place with various industries beginning to fail one after another as one failure had a direct effect upon another. It took many years, but once it all started – it couldn’t be stopped.
The big question is: Can we take America back and restore our industrial prowess?
The fact is: We certainly can’t continue along our current path. If we do, things will only continue to get worse.
Were there other causes contributing to the state of our present economy? Of course there were. There have been several mitigating circumstances that have led to our downward economic spiral. I’m only addressing what took place years ago that began the process.
About our U.S. flag merchant marine industry (what’s left of it) that you should know: In the best of times when the U.S. boasted the largest merchant ship fleet in the world, less than ½ of all freight shipped in and out of the U.S. was on board U.S. flag ships. That gives you an idea of just how much commerce that was taking place back then. The amount of freight tonnage moved in and out of the U.S. has substantially increased over the years, but these days, less than 1-1/2% of it is carried aboard U.S. flag vessels (and most of that is on board U.S. Navy, Military Sealift Command ships). That means over 98-1/2% of all freight moving in and out of our country is handled by foreign flag vessels! A bit shocking, isn’t it?
It seems to make perfect sense to me that reinstating the MARAD ship construction and ship operating subsidy program with stipulations that new U.S. flag ships be built in the U.S. with U.S. manufactured materials that would allow U.S. ship owners (they will all be new ones because most of the past ship owners are all out of business) would help to spur our economy, our infrastructure, and our national security. Of course, there is no way that the United States can reinstate the MARAD subsidy program as previously existed. Where would the money come from? There is no money available for yet another subsidy. After all, THE WELL IS DRY!!!!
We could consider an alternative program though. MARAD could initiate a similar program of having ships built to MARAD standards as before but using cost-cutting, tax-free incentives rather than subsidies. It would require cooperation with all levels of government in providing prospective entrepreneurial ship owners/operators with tax free operation over a number of years. Start with no property taxes, excise taxes, corporate taxes, or sales taxes for a number of years. Also waive any and all port and dockage fees for U.S. flag vessels in U.S. ports. Remove fuel taxes for all U.S. flag vessels when they are refueling in U.S. ports. Also offer similar incentives to all those investing in supporting industries like mines, steel mills, railroads, and all the others I mentioned earlier.
The tax-free incentive is really a form of subsidy. Under the old program, big fat checks were written to the ship owners/operators, but they still had to pay the myriad of taxes and fees of the day. The check was simply returned to pay all of the taxes. A tax-free incentive in place a subsidy check merely takes out some of the paperwork but achieves basically the same thing. The advantage of tax-free incentives is that the U.S does not have to increase our taxes yet again in order to write more checks.
I can hear the naysayers piping up already. They will read my suggestions about tax-free incentives and will begin screaming about how we can’t possibly afford the loss of all that tax revenue. My response would be to ask them how we can be experiencing a loss from taxes we are not collecting anyway because most of these businesses do not presently exist. Essentially, the development of such tax-free incentives in conjunction with a renewed MARAD program would cost us nothing (or very little). We have nothing to lose, but very much to gain. All of these new or renewed industries may not be paying (initially) corporate (and other) taxes, but all of the people making up the new, well paid work force would all be paying individual income taxes. They would be spending money in their local communities, and making purchases that help to support the national economy as a whole. I see such action as a “win-win” situation.
Such a move would happen slowly, just as our demise took place slowly, however it would put us on a path towards getting back on top and providing well paying manufacturing jobs for our citizens once again.
Protectionism you say? Perhaps to a certain degree, but I would just like to see the playing field put back into a level condition once again. By the way – most of the maritime countries around the globe subsidize their merchant fleets in one way or the other. That means to continue with business as usual in today’s world gives everyone else an unfair advantage over the United States. Think about it.
I’m sick of buying foreign made cheap crap that is over-priced, and doesn’t last. I’m sick of contributing to the wealth of people that speak languages other than my own and to third world governments & dictators. I want to be able to walk into almost any U.S. store and be able to purchase American made goods once again. I’m frustrated because I can’t do this today.
I can’t speak for everyone else, but I can speak up for myself. To all levels of government and legislators from the President on down to our town manager and town selectmen: I can’t live under the present burden of taxation. I can’t continue to earn far less (when jobs are available), I can’t afford to keep purchasing foreign made crap at high prices that won’t last. STOP trying to keep digging further into my pockets. If you truly wish to make more money for your pet pork programs – please re-read this letter from the top down and take some radical action to change things in our country – because – THE WELL IS DRY!!!!!!! Yeah! As you may have guessed, I’m just a wee bit TICKED OFF!!!!!
If you are in agreement with what I’ve outlined above, you might forward this on via email to other contacts in your address box. That’s what most folks seem to do these days – they forward things on and on, and so forth. If you are passionate about this subject, you might take things a little further. My suggestion is that you edit this letter as you see fit to essentially make it you own. Then print out hard copies and sign each one individually. Send a copy to each and every person that holds an elected position in every level and branch of government that represents you via snail mail. It’s easy for all the political aides to blow through email messages, but a hard copy in the hand makes it more likely that someone will actually read it, and perhaps one of these aides will actually bring it to the attention of the government official you sent it to.
This all takes time, and it also costs money for postage. It requires a commitment on your part. I think it’s worth doing though, and if it was easy, such action would have little or no value.
Please don’t allow our politicians to continue with business as usual without hearing your voice. Stand up and be counted. Make your wishes known! Take a stand! Get your butt up off the couch! Take action today – don’t put this off. Do you want to drink from the well again? It’s up to all of us as Americans to make things happen. Don’t rely on our representatives for all the answers. We have to help them out!
Great News! The potential to get American industry back in action is pretty good. Most of the politicians in office now were not there when the MARAD subsidies were taken away. Most politicians are presently scrambling for ways to help our fellow Americans get back to work and start earning good wages. I think they may be receptive to these ideas once they have reviewed my little history report on how much of our industries were lost and what started it all. I’d also venture to speculate that many of today’s politicians may not have any knowledge of the old MARAD subsidy program.
Buy American (if you can).
