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.
I think the point above was that if American has a problem Palin has the solution, even if the article has nothing to do with her.
Dreams and fairy tales are all very much alike for those who cannot deal with the real world and they serve a dual purpose.
Well in this case we can assume that every egg is golden even if the chicken is not on the nest and is busy leading the foxes around in circles .
I love analogies :)
He makes a heck of a cake mix.
Do something about the taxes and the regulations and the environazism and the unions that make doing business in this country increasingly unpleasant and THEN you can complain about free trade and outsourcing.
This guy Peter Morici proposes, more taxes, brilliant. Smoot-Hawley 2.0? That should fix the economy right up! Don’t but it.
We need to make American goods cheaper or better enough to justify being more expensive, not gouge consumers by making Chinese goods more expensive. That’s what I think, what do I know.
What do you know?
Plenty.
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