If he were sitting in the House chamber during President Barack Obama’s State of the Union Address, Churchill would have been flabbergasted by the contention that a “wealth gap” was the cause of the nation’s woes.

It’s not a wealth gap that is slowing recovery – it’s a crisis of confidence in Obama’s ability to lead the nation.

Some of history’s most accomplished leaders, like Churchill, got their inspiration from time honored thought leaders and statesmen. In his State of the Union Address, Obama got his inspiration from the Occupy movement, and catered to this largely discredited group.

This agenda is fraught with peril.

It is clear that rather than face the lingering unemployment numbers, Obama has decided to embrace a Pro-Poverty vs. Pro-Growth philosophy.

Looking to win reelection by instigating class war is immoral and inexcusable.

It threatens to break the very social fabric of this country. And some groups are starting to buy into this toxicity.

Politico recently revealed that the number of times the media mentioned the phrase “income inequality” increased nearly five-fold during the first two months of the Occupy protests.

In a late 2011 poll by the congressional daily newspaper The Hill, data showed that almost 75 percent of Americans believe that inequality is a problem for the United States.

In his State of the Union Address, the president suggested that: “We can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

This is his reference to the “Buffett Rule,” a proclamation by Warren Buffett that his tax rate is less than his secretary. And if to drive the message home, Buffett’s secretary Debbie Bosanek, was sitting near Michelle Obama.

This issue is misleading because Obama continues to equate the capital gains tax rate with the ordinary income tax rate. These are two different taxes.

For Buffett or any other person, before having capital to invest you have to first earn it, which leads to higher personal income rates. But these funds are being redeployed and invested into all sorts of enterprises, small and large, new and old, at a lower tax rate to encourage, inspire and create a class of risk takers. Without risk takers, there can be no job creation.

Now Obama is suggesting that a tax rate of 30 percent be imposed on the wealthy. But if you listen closely, the definition of wealthy keeps changing.

Remember when the wealthy were once Americans with annual incomes of $250,000? Now they are described as “millionaires and billionaires.” If this is supposed to mollify most Americans, it will be an utter failure.

The late comedian George Carlin once remarked: “Conservatives say if you don’t give the rich more money, they will lose their incentive to invest. As for the poor, they tell us they’ve lost all incentive because we’ve given them too much money.”

Does he honestly think that Congress will be amenable to altering the current tax code during an election year? Understanding we have a serious problem with our tax code, it is going to take far more than a couple of tweaks to fix it. This is pure political rhetoric.

It is also a self-fulfilling prophecy. Obama cannot mention jobs without raising taxes, growing the size of government and increasing regulations. These are not compatible to job creation; something he would have instinctively known if had ever had to create jobs, or even included job creators in his inner circle.

In his State of the Union Address, the president boasted that: “If you’re an American manufacturer, you should get a bigger tax cut. If you’re a high-tech manufacturer, we should double the tax deduction you get for making products here.”

It sounds like a practical idea, but most economists contend that tax breaks to encourage specific investment decisions are a bad idea, and are rarely effective. Tax breaks given in the past actually diminished investment by the technology sector. Instead, it is generally agreed that the key to investments and job creation is reducing corporate taxes.

It is obvious that a desperate Obama will try throwing everything and anything against the wall to see what sticks. Promising more handouts? Sure.

Castigating the wealthy as the scourge of the earth? Sure. Creating class war? Sure. Creating jobs? Not so fast!

The Obama State of the Union Address was nothing more than a stump speech that he will be making across the country. And he got the networks to help him get his reelection bid out to America. But this time people are listening and they don’t like what they hear.

According to Kantar Media, which studied the tuning behavior of 100,000 households across the United States in the moments leading up to, during, and after President Obama’s State of the Union address, during the first five minutes of the address, 27 percent of the audience tuned away.

The bottom line for Obama: no jobs, no votes.

That’s not the case in Europe, which is experiencing a domino effect as once financially viable countries are drowning in debt and are in danger of defaulting.

What we do have in common with Europe is some of our best and brightest people are leaving our labor force, for many of the same reasons.

Currently in Europe, the economic downturn is driving tens of thousands of skilled professionals away from their home countries. Spain and Portugal have been hit hardest by the flight of skilled workers, but the problem is worsening in Ireland, Slovenia, Greece and Cyprus.

A Wall Street Journal story reports that during the decade ending in 2008, more than 500,000 workers entered the Spanish work force each year. Last year, with a 20 percent unemployment rate, “Spain became a net exporter of people for the first time since 1990. Some 55,626 more people left the country in the first nine months of 2011.”

Workers are bringing their skills to Latin America, the Middle East and Africa, where ex-pats have found a new, more-profitable life.

At the same time, since Europe is losing its luster as a financial haven, skilled and highly educated workers from developing countries are returning back home because of rapidly diminishing opportunities.

Consequently, the future of some European countries looks even bleaker since there is steady erosion in the skilled labor force, which directly and significantly impacts productivity and economic growth.

Another consideration is the flight of trained medical personnel leaving some European countries, putting patients in these counties at risk due to a lack of healthcare practitioners.

This brain drain is also hurting America, where the State Department now estimates that 6.3 million Americans are studying or working abroad, the highest number on record.

In fact, according to a survey by marketing consultants America Wave, the percentage of Americans aged 25 to 34 actively planning to relocate outside the United States has quintupled in just two years, from less than 1 percent to 5.1 percent. This is an alarming statistic and unthinkable a few years ago.

This problem is exacerbated by scores of overseas students possessing great potential attending U.S. universities that are being forced to take their hard-earned knowledge back home.

Yes, part of the problem is the American economy isn’t producing jobs. But the bigger problem is that our current immigration policy is broken. So, even those who want to remain in America are punished by a poorly administered visa program that forces technically savvy workers to leave.

Let Europe serve as a cautionary tale for the United States. We must do more to keep workers with the greatest potential in the United States. That means creating an environment where entrepreneurs are inspired to invest so we create the jobs to keep the most talented here among us.

However, there are endless barricades to growth.

We need to provide entrepreneurs access to financial resources while lowering crippling taxes and ratchet back stifling regulations; all of which kill employment.

Just 44 years ago, America eliminated U.S. immigration discrimination based on race, place of birth, sex and residence. Now we need to enact a fast-track visa program so the most skilled would-be immigrants continue to come to this country, bringing with them their creativity, dedication and business skills that fuel our economy.

We have our historical roots in Europe, but have come a long way since our first ancestors arrived on the shores of the New World in pursuit of freedom and opportunity.

America has learned a thing or two over more than 200 years. We are now leaders, not followers.

In order to keep America strong, we must stay committed to a strong work force and work ethic, backed by innovation and inclusiveness. That’s what has got us here and that’s what will continue to make America the most sought after destination in the world.

Obama wants to put the office of the United States Trade Representative (USTR), the U.S. Export-Import Bank (EXIM), Overseas Private Investment Corp (OPIC), the Trade and Development Agency (TDA), the Small Business Administration (SBA) and parts of the Commerce Department under a new roof — something that has been kicked around for years.

As I point out in my book “Conscientious Equity,” we have created a bloated behemoth government infrastructure to manage our global trade relations that is uncompetitive and inefficient.

Our exporters aren’t getting the support they need to combat foreign governments that erode our access to markets by erecting insuperable barriers to our products and services while stealing our intellectual property with impunity.

Without the right government infrastructure to support our exporters, the U.S. is losing about eight million good paying jobs. You would think getting this right would be priority number one in our fight for jobs.

While at an event last April in Washington I handed to Lisa Brown, Assistant to the President and Staff Secretary (she had recently been appointed to a leadership role to guide the White House government reorganization team), a copy of “Conscientious Equity” and told her it contained the solutions to our global trade problems and provided a vision for America’s trade relations with the world.

A short while afterward, I received calls from her office to discuss the chapter “Creating a New Organization” which addresses the very crowded table created by our multitude of trade agencies. We had long discussions during which they appeared to be very receptive to my ideas. I was encouraged that the ship would be righted.

Unfortunately, last week, as the announcement of the Administration’s government reorganization plans were revealed, Obama only mentioned six agencies to be consolidated. This completely ignores at least 21 agencies with overlapping trade responsibilities. Each of these agencies is their own fiefdom complete with kings and queens, legions of workers and cavernous castles that seem to go on for miles.

The savings being projected by this consolidation would eliminate 1,000-2,000 jobs and $3 billion in overhead — a fraction of what it could be if they took bolder steps.

Although it is a step in the right direction, it is a timid step, and one anchored in politics. I am afraid this is only electioneering to show the president is a cost-cutting, bureaucracy buster. You can’t put lipstick on a pig.

It is time to get serious and move towards a comprehensive consolidation that sends an unmistakable signal to the world that global commerce will no longer be an afterthought for the U.S., and that we will stop relegating its management to a hodgepodge of government organizations.

That’s why it’s time to create The Department of Global Commerce, headed by a Secretary of Global Commerce who has extensive experience in international business. Then we must give this department the ultimate power in making trade policy recommendations to the president. All agencies focused today on commerce and trade would be consolidated into the Department of Global Commerce.

The role of the Secretary of Global Commerce would be substantially different from the current role of the U.S. Trade Representative and the U.S. Secretary of Commerce. This cabinet member would preside over all trade policy discussions.

The current Trade Policy Review Group and the Trade Policy Staff Committee are bureaucratic bodies that stand in the way of clarifying objectives.

The Secretary of Global Commerce would, of course, receive input from other departments and agencies, but he or she would outrank the heads of other departments in matters of global commerce.

This consolidation would free up billions of dollars, some of which could then be reinvested into the hiring of lawyers and other staff needed to do battle with our competitors in enforcing trade agreements and protecting our intellectual property.

This would cost the American taxpayer nothing, but would be a tremendous asset in opening foreign markets to American products and services, and helping American companies trade on a level playing field.

One would think that we might have considered this consolidation approach necessary around the time of the 1947 Marshall Plan (The European Recovery Program). Or at least tried to streamline our bureaucracy during the 1970s when we first started to amass a significant trade deficit.

As we have seen in national security matters, we are extremely slow to recognize that too many cooks in the kitchen turn out a lumpy and unsavory broth.

This new consolidation and emphasis on global commerce shouldn’t become an election gambit. It’s too vital to our economy. And even more vital to putting Americans back to work.

Nothing could be farther from the truth.

If you listen closely, he will side-step the priorities he failed to accomplish in his three years in office, and won’t accomplish in 2012. They all have one thing in common: They are needed like blood to resuscitate a hemorrhaging economy where flat lining job creation is beyond the hope of recovery anytime soon.

Here are the five issues he must address to create jobs but will fail to act on.

1. Using tax reform as a competitive advantage

When a company spends its energy wading through and complying with an onerous and confusing tax code, it creates uncertainty. Uncertainty kills jobs. To suggest as Obama often does, that American businesses believe they are not paying enough taxes, is absurd.

Our tax code forces our manufacturers to move operations overseas where it favors foreign producers, even as it discriminates against American producers hiring American workers. It is time that the U.S. tax code stop infringing on American business prosperity, and instead institute a tax code that gives us a competitive advantage to bring our factories home and to grow jobs in the United States.

During the Reagan years, from 1981 to 1989, tax reform helped make this period the most prosperous in American history, creating some 17 million new jobs.

President Ronald Reagan understood that by simplifying the tax code and reducing corporate taxes, it incentivizes our job creators.

There are some promising ideas circulating such as the Flat Tax and the Fair Tax. But these are being ignored by an administration that isn’t willing to fix our current broken tax code other than piling on new taxes. We need tax reform that works with us, not against us.

2. Passing healthcare reform that establishes an efficiently run healthcare system

We all agree that the current healthcare system is a convoluted mess. It is too costly and too fragmented to be effective. It rattles the mind to realize the cost of healthcare is increasing each year at six times the cost of inflation. If left unchecked this alone is enough to turn an economic superpower into one resembling a third-world country.

The Supreme Court by mid-year will rule that imposing personal mandates to purchase insurance is unconstitutional, thereby tossing Obamacare into the trash bin.

The question is what comes next?

It will take a new administration not encumbered by the embarrassment and folly of Obamacare to keep America competitive by finally presenting healthcare reform that focuses on affordability, accessibility and predictability.

3. Immigration reform that builds our economy by attracting the world’s best talent

Obama promised immigration reform, but when highly skilled immigrants who have received degrees at our universities are punished instead of being recruited to boost U.S. technology and innovation, America loses. Foreign students come to the U.S. to take advantage of our exceptional higher education system. We need to retain that knowledge here through a visa program that allows them to contribute in a significant way to our economy.

Truth be told, some of the world’s best minds and most talented entrepreneurs are lining up each morning at our embassies hoping to come to America to invest their talent, education and resources. Sadly they are being turned away in record numbers. Just seven percent of our permanent visas are given to people whose skills could reinvigorate our global leadership. Unfortunately we are losing the recruitment battle to countries like Canada, Australia and New Zealand.

We must stop denigrating illegal immigration and focus on legal immigration.

4. Regulation reform that reduces the burden on our job creators

Though Obama has given lip service to the excessive regulation being thrown at our job creators at the federal, state and local levels, he has done little about it. The best he could do was find $10 billion in cuts out of the $1.7 trillion each year our businesses spend in compliance costs. That’s more than they pay in taxes!

Instead of spending $800 billion on a failed stimulus, for which every dollar we had to borrow, we should reduce the cost of regulation. We would not need to borrow a penny and it would be a boon to job creation.

5. Education reform that puts equal emphasize on vocation.

The Obama administration is populated with Ivy League alums. Besides having no connection to our job creators, they have no connection to other types of education. Specifically, they fail to recognize the relationship between education and vocation. That’s why they have ignored data that projects that over half the jobs generated over the next decade will not require a college education but technical training. Technical jobs pay well and are in high demand.

To balance our educational needs, it will take a new leader with vision that understands job creation at its most basic level. We have one of the smartest and hardest working workforces in the world. We need to ensure they are equipped to compete. We have not done well in tapping into the inherent skills of our workforce to fill today’s technical jobs and those of tomorrow. .

As the election draws nearer, the Obama administration’s glaring missteps in job creation and righting the economy will become increasingly clearer to the American people. In 2012 there will be no legions of believers lined up several blocks to vote. They have tired of the rhetoric without action and have found that Obama’s vision and leadership were no sturdier than the backdrop of faux Roman pillars at Mile High Stadium where he accepted the Democratic nomination.

What’s worse, in order to get re-elected he cannot run on his record. No more lofty ideals and pretending to be the “President of all Americans.”

Even his supporters are disenchanted, recognizing that his ideals were merely campaign fodder. In order to win he will need to go on the offensive and run the most negative, cringe-worthy campaign in American history.

This will redefine gutter politics.

He once ran as an immortal, now he is just running scared.

I know I am not the only one waiting for something to happen to get this nation back on track.

Our small businesses, entrepreneurs and 14 million unemployed feel an endless gnawing, the grinding of gears, as America performs like a broken clock.

Time stands still. It has become all about the waiting.

• The waiting for the Supreme Court to strike down Obamacare so we can get our future healthcare costs under control. The Affordable Healthcare for America Act is anything but affordable. When the majority of states consider it unconstitutional, something is very wrong. It’s just one more thing keeping small business from hiring. If you can’t budget healthcare costs, you can’t budget the money to hire.

• The waiting for a bi-partisan compromise on the deficit crisis — a compromise that won’t raise taxes on America’s job creators. Congressional bickering and a stalemate on action merely create uncertainty. Uncertainty is the enemy of job creation. As are excessive taxes.

• The waiting for leadership that leads from the front and not from the rear. Leadership with a vision that has America taking its rightful place in the world economy and competing with all nations. An America that is not scared, but has the wisdom to defend and protect its economic interests. Leadership that ensures American exporters have the same access to foreign markets as foreign manufacturers have to the U.S. market. It also means that our intellectual property is protected and cherished.

• The waiting for the end of cronyism; when politicians are more interested in this nation and its people, than their pet projects and re-election. As history has repeatedly shown, market forces pick winners and losers, not the government.

• The waiting for a sincere effort to reduce the $1.7 trillion in government regulation and compliance cost. When business owners are grappling with unfair and harsh regulations, they aren’t thinking about hiring.

• The waiting for tax reform that vastly simplifies the tax code and that incentivizes for our factories to return home. Even a staff member of the Internal Revenue Service characterizes the American tax system as not only a mess, but an “extraordinarily complex” mess … and not just for individuals, for corporate entities and businesses.” When American manufacturers are punished for making money, it’s no wonder so many move their plants overseas. We need them to come back home so they can hire U.S. workers.

• The waiting for American free enterprise, economic freedom and personal liberty to take their rightful place as the foundation of U.S. exceptionalism.

• The waiting for an America that is confident in itself once again. Where the American Dream isn’t a slogan, it’s a reality. It’s time for Americans to believe that the best days of this nation are ahead. Don’t fall victim to negativism that is eroding our collective spirit. America is the greatest, most successful nation in the world. We need to start embracing this and demanding that others do, too.

Come, sing along with me: “Every day you see one more card, you take it on faith, you take it to the heart — the waiting is the hardest part.”

I’m tired of waiting, and you should be too. That’s what elections are for.

Ironically, that’s how much time American taxpayers spent this year fumbling through stacks of confusing IRS forms. Americans spend about $300 billion a year in tax-preparation costs traversing a mind-bursting 3.4 million word tax code.

The net effect of this archaic tax system is not only its compliance cost, but it ultimately punishes companies for being successful and discourages them from hiring. Taxing our corporations and businesses is a giant hoax. Taxes and tax related costs paid by our companies are simply passed on to the consumer.

Those being impacted most from corporate taxes are the poor who have less to spend. The best way to protect the poor (and the middle class) is to ensure they have good paying jobs and keep more of their hard-earned money. It is estimated if corporate taxes were eliminated consumer prices would be reduced by 25 percent. This would vastly improve the quality of life for all Americans.

Fortunately, some fresh thinking has the potential for turning the onerous U.S. tax code into an engine for job creation and to put millions of our people to work. These ideas can be implemented quickly and thus be a positive force in difficult times.

The two leading options for tax reform are the flat tax and the consumption tax. Both would raise $2.4 trillion, the current level of tax revenue being collected, while vastly improving America’s productivity and competitiveness.

The flat tax would be filed on a postcard-sized form. The only deductions contemplated would be for charitable contributions, child care and healthcare costs and mortgage interest, which politically are very popular with most tax payers.

According to the Heritage Foundation, adopting a 17 percent flat tax “would lead to significant improvements in U.S. economic performance after the first 10 years of its implementation. Specifically, this new tax system would lead to 3.8 million more jobs by the end of the tenth year; add $545 billion to gross domestic product in the tenth year alone; increase the level of personal savings by 50 percent; raise non-residential investment by 9 percent; and expand the nation’s capital stock from $17.8 trillion in 2014 to $19.1 trillion.”

The flat tax eliminates the tax bias against savings and investment, thereby ensuring better economic performance in a competitive global economy.

The consumption tax is best characterized by the FairTax, a nonpartisan piece of legislation that abolishes all federal personal and corporate income taxes, as well as payroll taxes, estate taxes and capital gains taxes. In their place would be one simple 23 percent national sales tax based on what a consumer spends, not on what they earn.

Tax collection would be the responsibility of each state and imposed on all new purchases of products and services. It enables retirees to keep their entire pensions, refunds in advance the sales tax on purchases of basic necessities up to the poverty level, removes the tax advantage of foreign produced products sold in America, and brings transparency and accountability to tax policy.

Best news of all, it abolishes the IRS.

Under the FairTax the rich naturally pay more.

What the two tax reform programs have in common is they take the uncertainty out of business planning allowing business owners to reduce their high marginal tax rates so they are encouraged to take more risk and create more jobs.

Both tax plans would safeguard Social Security and Medicare.

According to Harvard economist Dale Jorgenson, tax reform would boost national wealth by nearly $5 trillion, by increasing the value of all income-producing assets. Imagine how this wealth would filter through the economy in increased share values and investment capital.

We must incentivize our entrepreneurs to get into the game. There is a faulty perception that business owners keep all the money they make to feather their own nests. This is a myth perpetuated by people who have never started or run a small business.

The current tax system rewards cronyism and penalizes entrepreneurs and small business. Enacting a new tax code would be a boon to these over-taxed, hard-pressed job creators.

If the objective is to stimulate private-sector led economic growth, increase tax receipts, simplify compliance, close loopholes, and promote fairness then it starts with adopting a totally new approach to the U.S. tax code. Options are on the table that every tax payer – especially job seekers — should embrace.

In fact, some economists are predicting that by 2015, the fully loaded costs involved in operating a manufacturing facility in the United States won’t only match that of China, but will actually be less costly and far more efficient.

China’s reliance on cheap labor is about to hit a great brick wall. Pay for factory workers in China has soared by nearly 70 percent between 2005 and 2010. Assuming that Chinese wages continue to rise at about 20 percent a year while U.S. salaries stay constant, American labor will be a bargain.

There is already a steady shift of American manufacturers opting out of moving operations overseas and a growing number are moving their offshore operations back to the United States.

China isn’t the only country that is losing favor with U.S. manufacturers who are also heading home from Mexico, India and other countries in Asia.

As an American manufacturer and exporter, I am always looking for opportunities to make and source more things here. American products made by American workers, fairly competing in the global marketplace is a simple proposition with far-reaching implications. Believe me, “Made in America” is still a very powerful selling tool. Its comeback is long overdue.

Why the change in attitude? It’s not just about wages. It’s about efficiencies and protections. The cost of corruption, deficiencies in infrastructure, non-existent due process, intellectual-property theft, kowtowing to technocrats, restrictions of activities, cultural nuances, personal security concerns, higher costs of basic necessities such as energy and communications and the complications of managing a work force half-a-world away, was never factored into original justifications to move overseas.

Those building plants in China are forced to divulge their technology and partner with local entities that bring no value. When their technology is pilfered, U.S. companies must deal with a legal system that is crooked and skewed against them.

This propels the proliferation of intellectual-property theft which the U.S. Department of Commerce estimates costs American companies more than $300 billion a year, which ironically is equivalent to our trade deficit with China.

American business owners are sadly learning a costly lesson that when playing by the rules, not only do they lose control of their trade secrets, they also wind up creating their fiercest competitors.

Add to the mix the growing cost of transportation and logistics, which by necessity is reflected in higher prices. Supply chain challenges driven by keeping inventory costs down and the expectation of immediate deliveries are further justifications for staying stateside.

I don’t begrudge those American companies that have taken the plunge and moved overseas. We love to pin blame for our failings and many in our country lay blame on our corporations. As an entrepreneur, to keep our companies growing and vibrant, we must deal with the world as it exists, not how we wish it to be. The world is full of inequities and contradictions.

The U.S. government for so long has been able to make abysmal decisions without sacrificing the perception of prosperity because of the seemingly never-ending wealth of our country. These days are gone.

Combine this with China’s penetrating focus on creating every advantage for itself that it could possibly contrive and you have the dysfunctional world in which must find a way to fit in or perish.

However something is amiss. It has taken some time to realize, but the benefits of moving overseas have been greatly exaggerated. Our government must seize this opportunity and create the conditions whereby this trickle to return home becomes a flood. They could start by pledging not to raise taxes.

I don’t want to paint an overly rosy picture. There are still many multinationals building overseas facilities to meet growing foreign market demand.

And because of excessive bureaucracy and regulations, it can take five years or more to build a new factory here. But if this movement gains momentum, which I believe it will, workers in the U.S. will soon see a light at the end of the tunnel.

We must re-instill the belief that America is coming back and it’s still the land of opportunity.

“Made in America” means “Jobs in America.”

© Moneynews. All rights reserved.

Read more: ‘Made in America’ Will Build Jobs in Great Comeback

The most powerful nation on earth defaulting on its debt obligations would seem to be pure science fiction. But truth be told, in 1933, the first year of Franklin Roosevelt’s presidency, the United States did default on its debt. But this was a slight of hand trick that bought time to repay the holders of U.S. bonds used to finance World War I. Roosevelt was able to convincingly reassure debt holders that if they wanted their money, it was backed by gold and they could be repaid in gold coin if they chose. Fortunately, few took him up on the offer.
Our dollar is no longer backed by gold. It is merely “vapor paper.” The Treasury Department with a few key strokes on a computer creates billions of dollars hoping to forestall an economic collapse. Things are coming to a head.
And if you think sovereign nations rarely default on their debt, 106 countries have defaulted 250 times since the end of the Napoleonic Wars in 1815. The most common defaulters are Costa Rica, Ecuador, Mexico, Uruguay, and Venezuela—each of whom defaulted numerous times.

This phenomenon is not limited to Latin America. The United Kingdom, Ireland and Greece came perilously close to defaulting last year, and Japan is in serious trouble. It would be a tragedy of unimaginable proportions if the U.S. found itself in the same situation.

One sure fire way to get America back on course is to improve our trade imbalance. America’s trade deficit in goods and services increased to $497.8 billion in 2010 from $374.9 billion in 2009. Our deficit with China increased from $226.9 billion in 2009 to $273.1 billion in 2010. A bit of good news is U.S. exports increased $261.0 billion to $1,831.8 billion in 2010. One crucial benefit to boosting trade is it restores confidence in the American Dollar.

There are perceptions with many of our trading partners around the globe that the Dollar is losing its luster. The dollar must continue as the world’s base currency and we must stave off any attempt by China to replace the Dollar with the Yuan. The American “brand” begins and ends with the importance of the Dollar. If it were to be replaced there would be an accelerated decline in the American standard of living.

Chinese President Hu fired a warning shot across our bow recently with his statement “the Dollar is the past and the Yuan is the future”. This was a rare moment of Chinese true intensions. In a world of Chinese economic leadership there will be very little American job creation and whatever jobs are created will be at Chinese wages. The quickest way to fulfill President Hu’s prophecy is to default on our debt which would trigger the world community to trash the Dollar in favor of the Yuan. .

Our hope must lay in the ability of our government to reduce spending and the accumulation of more debt. Already, new estimates based on the Obama Administration’s 2012 budget reveals that interest payments on the national debt will quadruple in the next decade to more than $600 billion annually. History teaches us the fall of great empires come when nations can no longer afford the carrying costs of their possessions. We can already see the day when we will spend more on interest than our defense.

I have confidence that the American people fully engaged in our country’s future will not sit idly by while our government slips into default. Losing our pride will be the easy part. Our security and life as we know it hangs in the balance.

And then I started searching the skies for more UFOs when this Presidential look-alike proclaimed that it was time to shrink the federal government. It froze my blood. After racking up trillions in debt through out of control spending on stimulus and social programs, he said it was time to reduce the size of government?

But I really started trembling when the President clone said he is willing to extend George W. Bush-era tax cuts for most Americans. A program he fought against tooth and nail? And now he’s for it? I looked for the giant pod that he sprang from.

But it came to me. Like any good sci-fi film, there’s a surprise twist ending that explains everything. The speech took place in Cleveland, Ohio. Why there? Oh…that’s the home state of his nemesis, House Minority Leader John Boehner, R-Ohio. Ah ha! And isn’t that where Democrats are trailing in all the polls over the economy in Ohio? It’s all becoming clear. This wasn’t a clone after all. It was the real President Obama saying anything that will get him and his fellow Democrats re-elected. And that’s a horror story I’ll save for Halloween.

I own a large collection of antique engravings and maps dating back more than five hundred years. They tell a fascinating story that divines the future if you are perceptive to their wisdom. Clipper ship entrepreneurialism was the strong, steady wind that propelled forth the Age of Discovery. The embassies, merchants and holy men billeted on these magnificent ships faced incredible hardship as they searched for undiscovered trade routes that could potentially change the balance of power while enriching themselves beyond imagination.

Chinese Qianlong Emperor

Included in my collection is a large engraving that mapped a British Embassy sent to Beijing in 1798 at the height of the Chinese empire to meet with Emperor Qianlong. Emperor Qianlong had no use for foreigners. He derisively addressed the British Ambassador: “We possess all things. I set no value on objects strange or ingenious, and have no use for your country’s manufacturers”.

The British took meticulous notes. They were eager to know the extent and power of the Chinese empire. The Emperor claimed sovereignty over everything from the Asian continental shores of the Pacific Ocean to the Indus River. He held sway over India and Southeast Asia including Burma, Cambodia, Laos, Thailand and Vietnam. The great steppes of Central Asia extending across Eastern Russia and the Korean peninsula and everything in between were all his.

Low demand for British goods in China and high demand for Chinese goods such as silk and tea in Britain forced British traders to purchase these products with silver and gold, the only currency accepted by the Chinese. The British quickly began accumulating large trade deficits that it could not sustain. They needed to find an economic substitute for the silver and gold that would come with greatly reduced prices. The solution, although illegal, was to begin smuggling opium into China from the plentiful poppy fields of the Indo-Gangetic plain. Despite Emperor Qing’s prohibiting the import of opium into China, it wasn’t long before the Chinese people, including government officials, became addicted to the opium.

Raw opium contains some twenty different alkaloids of which morphine is one. Morphine affects the central nervous system. It also impairs mental and physical performance, relieves fear and anxiety, and produces euphoria. Morphine’s euphoric effect is highly addictive. Tolerance (the need for higher and higher doses to maintain the same effect) and physical and physiological dependence develop quickly. The malevolent outcome of morphine addiction is that it masks any underlying health problems, so although the user may actually be dying, the euphoria deadens the pain until the person succumbs to the disease.

China’s addiction to opium ultimately led to two Opium Wars with the British Empire from 1839 to 1842 and from 1856 to 1860. China was routed and disgraced both times. Britain forced the Treaty of Nanjing and the Treaty of Tianjin on the now feeble China. Together, these are more commonly known to as “The Unequal Treaties”. The British gained extraterritorial rights including its settlement in Shanghai and the cession of Hong Kong Island from which they could freely operate trading activities, including the unrestricted importation of opium.

Several other countries including France, Germany, Russia and Japan demanded and received similar arrangements from China. The humiliation of The Unequal Treaties eventually led to the fall of the Qing Dynasty in 1912 and ultimately the end of dynastic rule. In just forty years China had fallen from one of the greatest empires ever assembled to lying prostrate before hated foreigners. It is one of the most rapid declines of any empire in the history of the world and can be largely attributed to the opium that caused China to sacrifice its dignity and pride.

China’s addiction erased centuries of glory and unleashed a thirty year revolution. It allowed for events such as the Rape of Nanjing, the communist takeover in 1949 and purges of the Cultural Revolution. It created conditions in which China’s citizens lived under foreign sovereignty in their own country.

You could say China’s downfall could be attributed to “Morphine Economics”. If you study China’s sad history throughout the nineteenth and twentieth centuries you can certainly understand its distrust of the West. China has passed through decades that no great nation should ever have to tolerate.

China’s addiction should have served as a cold, stark warning. Imagine if we ever became addicted to something as devastating as opium. What would America’s fate be if we lay helpless and paralyzed before the world? Would the outcome be any less wicked than The Unequal Treaties?

written by Neal Asbury

Although Morphine Economics ended in China, another nation fell under its deadly spell: The United States of America. As its economy eroded, the United States began accumulating mountains of debt. The debt became our morphine. We borrow money to pay debts today, unfazed by the legacy of the debt that we will face down the road. The euphoria of appearing to have the economy under control masks the worthless “vapor paper” currency that is being printed to stave off economic collapse.

There are those among us who believe that out-of-control spending will make us healthy. They will look at any glimmer of improvement and shout out that the trillions we are spending (money we don’t have, by the way) are having a positive impact. Do not be fooled. We are becoming weaker. Any euphoria anyone is feeling is only the work of a sinister drug.

The ultimate irony, of course, is that whereas the United States is being crushed by its runaway debt, this debt is being bought up by China — a nation that innately understands the perils of Morphine Economics.

I think Emperor Qianlong, wherever he rests with his ancestors, gets no satisfaction from seeing a mighty nation make the same mistakes he did. It is up to us to learn the lesson and reverse our dependence on Morphine Economics before it causes irreparable damage to the economic health of our country and that of our future generations.