“If you’re buying stuff that was made abroad, well, you’re not measuring the domestic economy. You’re measuring the foreign economy.”
In the second half of the 20th Century Republicans often enacted tax cuts when gaining power with the stated purpose of stimulating the economy. The theory was reducing the government confiscation of the people’s income through taxation, the people would spend much of the addition money in their pockets on discretionary items which would “trickle down” through the economy. This trickle down effect would increase demand for products, which would increase production. The increased production would result in hiring additional workers to produce the additional goods. Those workers would in turn spend money creating a multiplier effect from the tax cut.
In 2021 new Republican president George W. Bush proposed, and Congress enacted, a tax cut. The Bush tax cuts had a much lower impact on demand for US made goods and services than previous tax cuts and in turn a lower impact on job growth. Why? A decade of outsourcing of US manufacturing, resulting from the “free trade” agreements started under his father’s administration and continued during the Clinton years. The tax savings of average citizens was being spent on goods made in China, Mexico, and other countries, not in the USA. Therefore, the trickle down and multiplier effects no longer generated powerful stimulus to job creation in the US economy.
The recent Covid stimulus checks and huge deficit spending by government are having similar effects today. We have 100 million working age people not employed in this nation. This huge unemployment situation is not visible in the low unemployment rate reports by the government because most of the 100 million not employed are classified as out of the labor force. The truth is those people still consume — they eat, require medical care, clothing, shelter and other goods and services to survive. The fact they consume, but do not produce, means they must be supported by the producers (through taxes to the government), by charity, or from their own savings (voluntary early retirees).
A 10 year plan to return the US to manufacturing self sufficiency would create a capital spending economic boom with a considerable boost to GDP. The new factories will provide jobs for millions of the able bodied working people currently not in the workforce. The employment of those currently unproductive citizens will in turn have a multiplier effect on the economy. Removing them from the welfare roles will reduce government spending. Having them earning income will increase tax revenues, allowing government to end deficit spending and begin paying down the national debt.
Open borders, one sided free trade, and a generous welfare safety net are tremendous drags on domestic economic activity and a direct benefit to the economies of other nations. It is long past time to end the failed policies and return to a booming economy that lifts all who choose to participate.
Slapping a US brand name on Chinese production is a major and profitable business.
The leg pee/raining will continue until the sheep are fleeced.
When stores raise prices by 10% in a year and banks pay trivial interest rates, bank depositors lose buying power.
This loss of buying power was running at about 2% a year. Under Joe Biden, the retiree loss of buying power is running at about 8% a year.