The following is a post by Alec Feinberg that appeared on the Economy In Crisis site.  Click here to see the post online.

Foreign Ownership of U.S. Companies 51% by 2033 with Skyrocketing U.S. Unemployment Projected due to the Trojan Horse Trade Deficit

Citizens For Equal Trade (CET) [1] is projecting that Foreign Controlled Domestic Corporations (FCDC) will reach 51% as a percentage of the whole by the year 2033, if current trends keep occurring along with large yearly U.S. trade deficits. We project to the 51% point as it is commonly considered a U.S. business take-over amount. This report is based on projections from a 2005 Grant Thornton Report [2] and other related IRS data receipts projected out from 2007 [3, 4, 5] (see Figures 1, 2 and 3 and Tables 1 and 2). FCDC ownership was already about 18% in 2007 [3] and is now estimated about 22% through 2010 [See Table 2]. We provide two different projections in the appendix, one simply by year (Figure 3), and another projection estimated from the correlation to the U.S. trade deficit data (Figure 2) that helps enables foreign ownership. The most reasonable (and conservative) estimate appears to be related to trade deficit data rather than by year. The trade deficit is a measure of how much more foreigners own of us then we do of them and is now at $8 trillion [6] through 2010 (Table 2). The factor of foreign ownership is found to be about 1.8 times the trade deficit amount (Figure 2) and currently helps enabling foreign ownership at a rate of about 1.25% per year. Although it is unlikely this factor will keep up, until data show otherwise, it is our best estimate as recent statistics are hard to find [3, 4, 5].

Furthermore using a reported 2009 employment rate by FCDC of only 3.5% [7] proportioned to their rather large FCDC estimated ownership in 2009 of about 21% (Table 2), it indicates that U.S. unemployment could skyrocket to over 35% by 2033. A scalable unemployment model for this estimate was used and is provided in Appendix A.4 of this article. The reader is cautioned that since this is a scalable projection, it primarily serves as a crude estimate of the U.S. foreign business employment position over time. Yet, such crude estimates are helpful to alert citizens of this projected plausible crisis.

The likely implications are:

• 51% Foreign control of U.S. business revenue bearing assets in the not too distant future (~25 years)
• Transfer of U.S. separation of wealth to foreigners
• Major reduction in U.S. consumer spending due to FCDC increases
• Excessive unemployment
• Uncertainty of the business future for Americans

Spurring this report is the recent unthinkable German acquisition of the U.S. N.Y. Stock exchange [8] now in progress.

Like China, Germans have large trade surplus U.S. dollars to invest, and they want real tangible U.S. assets with their trade deficit profits.

At what point will America ask the unthinkable question, ”If foreigners could own 51% of all U.S. business by 2033, will this still be a country owned by Americans and governed by them?”

The trade deficit started in 1971 at about $0.0013 trillion [6]. It accumulated to about $1 trillion just before the start of NAFTA. Since the Free Trade agreements with NAFTA in 1992 and China in 2000, the trade deficit has accumulated to $8 trillion [6] through 2010 (Table 2). During that time, FCDC were 13.9% [2] as a percentage of the whole on U.S. corporations where total assets at foreign owned companies increase to $9.2 trillion in 2005, up from $8.0 trillion in 2004 [2], with $12.01 trillion reported in 2007 [3]. This was more than three times the 1996 total of $3 trillion. Foreign-owned assets totaled just $37 billion in 1971 when foreign companies owned 1.3% of all corporate U.S. assets at the start of the trade deficit [2].

We have seen that lack of oversight has cost the U.S. government dearly in the Great Recession on the mortgage crisis. Here the lack of oversight is much worse. Not enough studies like the 2005 Grant Thornton report are available. Certainly no studies that project employment rate due to increasing FCDC assets. This when combined with U.S. owned assets increasing abroad due to offshoring and other reasons (see Figure 1) could severely challenge U.S. employment. Furthermore, it is well known that foreigners not only cheat in free trade but they also cheat when it comes to reporting their U.S. income taxes [9] which happens to be the main way we have to understand FCDC ownership. Therefore, it is difficult to know what the actual foreign ownership in our country really is. The U.S. will wake up one day in the not too distant future (25 years or less) and find that foreigners have taken control over our industry and our employment. As we may end up defaulting on our foreign owned government bonds, and are losing control over U.S. corporations to foreigners, it will be clear; we will have lost the war without a bullet being fired. We are becoming defenseless as we fight battles overseas. We coin the term “Trade Deficit Trojan Horse” here due to what is occurring. Readers should understand the connection, and become aware that the trade deficit also causes national debt [11,12,13]. The “twin deficits” [15] (trade deficit and national debt), are highly correlated with the trade deficit found to cause large increase in the large National Debt. [11,12,13,15]. It is clear that Congress is distracted and has little understanding of the need for balanced trade. Yet the trade deficit is the biggest threat to our economy, and if left unchanged, it will destroy America’s future in less than 25 years.