Replies

>--
The huge excess supplies of labor in countries such as China and India ensure that it will be many years before labor in those countries, both skilled and unskilled, will be paid the value of its marginal product.
>--

this by itself is a fallacy.. Value of marginal product IS what is paid for the labor to produce it, there is no inherent value. What happened is that with globalization price of most of the labor on the open market went down, WAY down. Excess supply means that product(labor) is way overpriced, market(when government doesn't stick its nose into it) corrects oversupply very fast. This leads to? YES cheaper goods. This means that you, I, Joe down the street can buy cheaper products.

People can talk all they want about closing down borders and such. But the truth is Genie is out of the bottle. Since technology exists to produce more efficiently(cheaper) outside companies will do it. If government gets involved, it will be bribed, corrupted etc until restrictions are meaningless. Ever looked at what is the ACTUAL tax rate as opposed to the one you think government makes corporations pay? Also where many corporations establish their headquarters to pay cheaper rates. As Friedman said, if companies in US actually payed the taxes they are supposed to, economy would grind to a halt and die.

Question that should be asked is America or Canada a useless country that cant produce goods more efficiently then India or China? No. If someone answers yes, well I hope nobody here does.

Why do people in US or Canada think that they entitled to some amount being payed for certain labor? None of us are, if some Indian in his shack can do the work I do for 1/10th wage + the expenses of communication. Then he deserves the job and I don't. If we want to maintain the salaries that we are payed then we need come up with more efficient way of production. People need to DEAL with it. Creating trade barriers is like hiding our head in the sand trying to avoid looking at fact of economic reality(they will still catch up with us make no mistake).

Already price for qualified outsourced labor is going up. In the industry I work for(product-data management systems) Indians are now losing contracts to east Europeans. Funny thing? North American contractors still getting payed $130 usd+ and hour, project managers way more. In fact I didn't notice any drop in rates at any time during the recession. Qualified smart people have project lined up for 2 years ahead.

In your England vs Portugal example. England needs to look at what is that makes it a poor place for producing anything and how can that be remedied.

here is my program :)
1. Flat revenue neutral tax 15% maybe 20%. NO exemptions of ANY kind. This by itself puts couple million of useless tax lawyers on the street and ready to contribute something usefull. Number of government leaches fired probably even more
2. ZERO minimum wage.
3. Remove all special treatment on unions from the law. Let the companies kill them at will.(only reason why Britain is still alive is that Iron Lady did what had to be done, broke union's back)
4.Privatize education completely.
5.Legalize drugs and tax their sale. Stop wasting government money on it.
5.National parks, state financed projects which are irrelevant to the core government responsibilities privatise.
6. Stop ALL international aid.

Just Flat tax and union laws removal would boost economy into incredible growth. There was an actual republican who had the balls to propose it during his bid for presidential nomination Forbes. In Canada we are stuck with the damn liberals for now.

/flamesuit ON :)

Points 1 & 5 conflict. Flat income tax, or sales tax on selected products?

Flat income tax on all income no exceptions, OK.
Flat end consumer tax on everything no exceptions, OK.

Tax some income sources and not others starts the whole mess growing again.

Tax sales of some products and not others starts the same type of rat's nest of "every product is special in it's special way" (to the tune of the Barney song) regulations, rules, findings, case law, and code bloat...

are you a property owner - reduce my apartment rent to $10 per month, like the chinese and indians, and my needed income goes down dramatically.

are you a resturanteer - reduce my lunch cost to the price in india and china - 25cents, and my food costs go down.

Then, I can compete with china and india.

Sorry--I can't get into a response to your post, nor all your proposals. Consumption tax is a good idea and a part of the puzzle. The rest of your proposals simply defy the principles of Western civilization.

.....People can talk all they want about closing down borders and such. But the truth is Genie is out of the bottle. Since technology exists to produce more efficiently(cheaper) outside companies will do it. If government gets involved, it will be bribed, corrupted etc until restrictions are meaningless.....

Great point. whatever we do we do not want too much big governemnt.