Posted on 06/13/2011 12:57:31 AM PDT by 2ndDivisionVet
President Obama's stimulus has failed, just as we predicted. Federal Reserve Chairman Bernanke's QE2 has failed, just as we predicted. The administration and the Federal Reserve have run out of ideas. There is still a solution, but Washington is ignoring it. University of Maryland economist Peter Morici sums it up in a June 9 commentary (Cut Trade Gap to Create Jobs). Here is a selection:
The trade deficit, along with the credit and housing bubbles, were the principal causes of the Great Recession. A rising trade deficit again threatens to sink the recovery and push unemployment to more than 10 percent....
At 3.5 percent of gross domestic product, the trade deficit subtracts more from the demand for U.S.-made goods and services than U.S. President Barack Obama's stimulus package added. The Obama stimulus was temporary and is dissipating, whereas the trade deficit is permanent and swollen again....
Cutting the trade deficit in half over three years would increase U.S. GDP by about $500 billion and create up to 5 million additional jobs. This would increase growth to 3.6 percent from the expected 2.5 percent and lower the unemployment rate by 3 percentage points....
Longer term, the combination of expensive oil imports and China's currency policies reduce U.S. growth by one percentage point a year. The U.S. economy would likely be $1.5 trillion larger today but for the trade deficits on oil and with Asia over the last 10 years.
Morici advocates more oil and gas drilling to reduce our imports on foreign oil. He also advocates a currency-conversion tax on Chinese products to balance trade with China. Morici concludes by calling our current trade policy with China "appeasement":
After diplomacy has failed for both Presidents George W. Bush and Obama, failure to act amounts to no more than appeasement and wholesale neglect of the administration's obligations to create a level playing field for U.S. workers.
Morici is correct. The United States is probably going to experience years more of high unemployment, simply because Washington's trade appeasement policy. That could change if Governor Palin is elected president. At the moment she is advocating both of the policies that Morici advocates: balanced trade and more drilling for domestic gas and oil.
Palin isn’t a protectionist. Her route to balanced trade is the removal of the burdens on American industry, not some ‘shoot-yourself-in-the-foot’ tariff.
I am really not sure how any of the Bushs were any different than Clinton or Obama.
It must just be me...i guess?
They are all the same from my point of view. And they are all thieving criminals. Certainly they are all multi multi multi millioairs
every one
President Palin will fix it in 2013
Generally, you are correct. However, specific to China, you are wrong.
A LESSON:
Free trade means floating currencies. If a country imports more than it exports, its currency devalues, which drives the prices of imported goods up.
China does not let its currency float. They peg it to the dollar, which keeps their prices artificially low.
China should be penalized for this.
Other countries that do not do the same should not get penalized.
I don’t really understand why we need to penalize any country who sells goods here.
If you notice just about every company is making their products in China. There are Americans who do nothing but arrange these business relationships with the Chinese.
And why do they do this? BECAUSE IT’S CHEAPER TO MAKE THE PRODUCTS THERE IN CHINA THAN HERE.....DUH!!!!
So what would it take to make the same products here cheaper? Reduce the cost to companies. Give them tax breaks...hell have them pay next to no tax...reduce their regulations etc.
I bet you’d have jobs galore, and tons of vacant warehouses and industries thriving again.
That is false.
China does not let its currency float. They peg it to the dollar, which keeps their prices artificially low.
This is no longer true. The Yuan is not pegged to the dollar. My wife just returned from a trip to Beijing. The dollar is now worth less. Prices in dollars there have increased there by around 50%. I was expecting to get my usual $50 watch, but now they cost $75.
What is the current Yuan / Dollar rate?
How much different is that, than a year ago in percentage terms?
And what were you doing in Beijing? Arranging imports?
Prices in dollar terms in Beijing do not reflect the exchange rate, because the Yuan does not float based on market conditions - the exchange rate is set by the communist government.
10 years ago the Renminbi exchange rate was around 6.7.
Now the exchange rate is 6.5
Meanwhile the dollar / euro rate has swung back and forth almost 50%.
And no, I am not in the import business.
OK my memory of the exchange rate then is wrong, but the exchange rate does not float.
Like everything in China it is set by the communist government.
We are selling America’s future to communists. For cheap crap in Walmart.
Maybe so. But the problem is that government would've spent whatever money that 1.5 trill would have brought in to The Treasury.
And then some.
Use prison and child labor. Reduce pay to U.S. workers to make labor compete with Chinese labor...about nine dollars a day should do it.
There is almost 0 tax on capital gains now...what more could the very wealthy want? Someone living off capital gains pays less of a tax percentage then the minimum wage worker. NAFTA did just what Ross Perot said it would do. That big sucking sound you hear is generated by all the hot air blowing in Washington because there are fewer jobs left here to export.
BOHICA
How does Germany maintain a trade surplus with China without making their citizens live on a bowl of rice and work at 14 as our union folks claim we would have to?
Remember that Trump had those easy sounding solutions, without credible details it’s all just smoke.
Here’s a start, dont sue companies like Boeing for opening up new plants in the USA.
Thanks, we do need a serious debate on this but we dont need more Trump-isms that are designed just to convince voters that there is another free lunch waiting for us.
Trump-ists ignored the fact that uni-lateral trade tariff's made up by a Trump crackpot would just result in trade sanctions on us killing our exports. The devil is in the details and anything that sounds easy is a sure fraud.
I must be missing where President Palin comes into this article. Sounds more like Trump.
In fact, I believe Duncan Hunter was saying this a few years ago.
I must be missing where President Palin comes into this article. Sounds more like Trump.
In fact, I believe Duncan Hunter was saying this a few years ago.
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