If our economy isn’t in recession, it sure feels like it. The subprime market failed because, in an effort to make even more money, lenders gave loans to people who clearly couldn’t afford them.  Subprime homebuyers are also to blame because they signed for larger houses than they could really afford. A booming housing market and insatiable spending can no longer mask our troubles. America is a slave to foreign oil.  America out produced every country in the world after WWII, but we don’t seem to produce or manufacture much of anything anymore.  America is saddled with catastrophic debt; which is owned by foreign governments. The consequences of our greed and inaction in solving important issues are destroying us. Gas costs 34% more that it did a year ago.  Some say we could face $4 a gallon! Eggs cost 34.7% more, cheese 14% more, and tomatoes cost 25.4% more than they did a year ago. Over the past year, the cost of wholesale goods increased at the fastest pace in 26 years. We have, in-effect, crippled big manufacturing firms and businesses in America with our tax policies and lack of enforcing our trade laws.  Now, this economic downturn is killing the backbone of America ; small businesses. Small businesses are suffering because credit is tighter and the terms are more stringent.  This has prevented them from getting funds they need to expand and hire new workers. Meanwhile, home sales have declined.  Home values have declined.  And new building permits, which tell us the strength of future construction, have declined to levels we haven’t seen since 1991. Worse yet, the decline in the economy has enabled foreign countries to chip away at our sovereignty. Most people remember the failed Dubai Ports deal; however, you may not know that the Chinese government has silently been purchasing shares and ownership stakes in American businesses.  Middle Eastern governments are using the billions of dollars we pay them for their oil to purchase ownership in American businesses! They purchase ownership in our businesses through what is called a “sovereign wealth fund.”  A sovereign wealth fund is money owned by a government - not a private businessman or business; but a foreign government that is invested in one of our companies. In the last year alone, between China and Arab countries combined - sovereign wealth funds have bought 8.1% of Advanced Micro Devices Inc., 9.9% of Och-Ziff Capital Management Group, 7.5% of Carlyle Group, 6% of Bear Stearns Cos., 9.7% of Blackstone Group, 9.9% of Morgan Stanley, 4.9% of Citigroup Inc. and 19.9% of NASDAQ! Most of these purchases are bypassing US government oversight and approval because our laws are weak and outdated.  Our laws also don’t require them to be fully transparent and publicly disclose their assets, liabilities, or investment strategies. In 2006, we actually did stop a Dubai sovereign wealth fund purchase of our sensitive port system.  Remember my letter to the President?  Where I told him not just “No” but “Hell No”?  But we only stopped it at the 11th hour, and only when the American public found out.  What if we hadn’t found out until it was too late?  Why are we, as a country, allowing this? And let’s not forget foreign entities also own the notes on 40% of our debt!!!  Chinese investors alone own $387 billion of U.S. Treasury bills! What happens when these foreign governments start to tell American businesses what to do?  What happens when they cash in their US Treasury notes and we can’t pay them? Clearly, they are growing stronger while we are growing weaker because they are taking our manufacturing jobs and buying what’s left of our businesses here. We must wake up! Washington ’s response is troubling. The Federal Reserve says the economy isn’t in a recession, but keeps slashing interest rates.  The Fed Chair, like the Bush Administration, seems unconcerned about foreign governments purchasing chunks of American businesses and infrastructure because the money they are investing is stabilizing our ledger books.  Am I the only one who believes there’s something wrong with that? If they can help to stabilize our economy, isn’t the opposite equally true? With ownership, they could destabilize us. The Bush Administration won’t get tough with China; they openly embrace the Saudi Royal family and their oil; and their response to high gas prices is holding hands with the Saudi prince and asking politely for relief at the pump. Forget polite let’s drill for our own oil and build our own refineries! Are you aware that we have not built a new refinery in America in 30 years?! Why? The last time a new refinery was built, Sanford and Son and Bonanza were first runs on TV. Does that make sense to you? Are you aware that America can’t drill for oil off our coast, but China is drilling 90 miles off our coast because Cuba granted them permission? That’s our oil! Where is the common sense? We should stop dancing with the Saudis and start looking out for ourselves. But that takes leadership - leadership that practices common sense. But what did your Congress try to do last week? Just last week, Congress took up legislation that would increase regulations and raise taxes on American energy producers by $16 to $21 billion!  Not only would this bill cause gas prices to skyrocket, but it foolishly gives Hugo Chavez kickbacks by exempting Venezuelan-owned CITGO—at a time when he is threatening to cut off oil to America ! Let me rephrase that…a foreign government got a tax credit.  US companies didn’t.  Where is the common sense? No wonder Americans and businesses are upset with Washington ! Our economy is based on trust and confidence.  Today, we have neither. The rebate checks Congress approved, and Bush signed, will provide some help; but they are more the equivalent of an aspirin to a fever.  It will only make the economy feel a bit better in the short term, but it won’t cure the underlying problems. So what do we do? Congress needs to cut spending, balance the budget again like we did in 1997 when I was on the Budget Committee, reduce our debt, and lower taxes.  That includes making all the current tax cuts permanent.  We should eliminate the Individual Income tax, cut Capital Gains taxes, make permanent the elimination of the Inheritance tax and pursue a Fair or Flat Tax in lieu of our current convoluted income tax system.  This will create more jobs and reduce long term interest rates, which will make loans cheaper for everyone.  The majority in Congress needs to be replaced with individuals who understand you can’t tax yourself out of a recession. Congress should also allow more American oil production, new refineries, drilling for oil off our coast and in Alaska, and push more new energy technology to get us off our dependence on foreign oil altogether. The Bush Administration needs to stop selling America ’s sovereignty to the highest bidder and stand up for our workers.  They need to force China to stop manipulating their currency, stop stealing our intellectual property, and stop their blatant economic espionage activities.  For starters, Congress needs to pass my bill that would raise tariffs on Chinese imports 27.5% until they show proof they are floating their currency on the open market.  They need to prevent foreign government investment in America from countries that have motives other than profit alone.  They need to stop fraternizing with people who are holding us hostage at the pump!  The Administration should do what I do and listen to my districts’ textile owners and workers.  I believe in “free trade,” but only if it’s “fair trade,” and that fairness is undercut when the Administration fails to enforce our trade deals. Oh, and another thing.  The President needs to block the multi-billion dollar Northrop Grumman air tanker deal you’ve heard about in the news.  I’m working hard to get that rigged contract voided and replaced by a contract that keeps those jobs here on American soil, where they belong.  Why are we giving Europe a US military contract when our workers need the jobs?  Not on my watch! Fed rate cuts alone won’t get our economy back on track.  American investors have no confidence in the financial industry.  Until they do, they won’t purchase enough mortgage backed securities to help lift the housing market. The Fed, along with the Bush Administration, should stop being Wall Street apologists and use their muscle to push the financial industry to reform its flawed lending practices.  This will restore trust and confidence and make risk worth the reward again for American investors. Main Street USA doesn’t need to look at numbers to understand that this economic downturn is painful; they can feel it.  If Washington acts with common sense, we may be able to get the economy back on track, as well as solve our underlying economic problems—rather than putting a band-aid on them and passing them on to our children.