Posted on 02/18/2005 9:55:18 AM PST by Willie Green
Virtually every quarter in the 90's was a new trade deficeit record. But like the homeless, when a democrat is in power, there is no problem.
Give it up Dems.
if you present americans with the cost of something priced in real dollars, unaffected by global effects - the cost of a college education, the cost of paying for private sector healthcare or health insurance - what happens? they run screaming to the government for subsidies. why? because most of them can't afford to pay for those things.
being able to ONLY afford imported chinese products is not a sign of wealth. my wealth is not measured by how many many $9 toasters I can buy.
I don't really want more income taxes or tariffs. The inherent disadvantage of tariffs over an income tax is that tariffs will bring on retaliatory tariffs from our trading partners.
Maybe economic growth in China is so high because it's still mostly a 3rd world country. Economic growth, historically, flattens out as economies mature. China is fighting significant internal economic issues - runaway credit, preferential lending practices to party owned or controlled companies, areas of hyper-inflation - that must be faced. They will face a few cycles of recession, maybe severe, as they continue to absorb dollars. Japan was in this position in the 70's and 80's, although they also had a scandalously over-valued real-estate market devouring a lot of free capital and generating bad loans.
By the way, they've announced that they are going to start moving to a market-basket currency model, which will push the Yuan up some. Such an increase can easily be absorbed in a low-cost labor market like China. The solution to the problem is to keep them moving towards the WTO and let them grow their way out of it. Economic growth will lead to political reform. You cannot have consumer choice on the scale available in China today and expect other forms of choice and expression to remain bottled up.
Japan, the EU, now China: seems we're always just moments away from economic doom.
From: http://www.state.gov/r/pa/ho/time/id/17606.htm
Smoot-Hawley Tariff
The Smoot-Hawley Tariff Act of June 1930 raised U.S. tariffs to historically high levels. The original intention behind the legislation was to increase the protection afforded domestic farmers against foreign agricultural imports.
Massive expansion in the agricultural production sector outside of Europe during World War I led, with the postwar recovery of European producers, to massive agricultural overproduction during the 1920s. This in turn led to declining farm prices during the second half of the decade.
During the 1928 election campaign, Republican Presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products.
But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history.
The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better. It provoked a storm of foreign retaliatory measures and came to stand as a symbol of the ‘beggar-thy-neighbor’ policies (policies designed to improve one’s own lot at the expense of that of others) of the 1930s.
Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934.
More generally, Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations. The Smoot-Hawley tariff represents the high-water mark of U.S. protectionism in the twentieth century. Thereafter, beginning with the 1934 Reciprocal Trade Agreements Act, American commercial policy generally emphasized trade liberalization over protectionism. The United States generally assumed the mantle of champion of freer international trade, as evidenced by its support for the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the World Trade Organization (WTO).
Additional Reading: Barry Eichengreen, “The Political Economy of the Smoot-Hawley Tariff,” Research in Economic History, 12 (1989), pp. 1-43. Douglas A. Irwin, “From Smoot-Hawley to Reciprocal Trade Agreements: Changing the Course of U.S. Trade Policy in the 1930s,” in Michael D. Bordo, Claudia Goldin, and Eugene N. White, Editors, The Defining Moment: The Great Depression and the American Economy in the Twentieth Century (Chicago: University of Chicago Press, 1998). Charles P. Kindleberger, The World in Depression, 1929-1939 (Berkeley and Los Angeles: University of California Press, 1973). Peter Temin, Lessons from the Great Depression: The Lionel Robbins Lectures for 1989 (Cambridge, Massachusetts: MIT Press, 1989).
Where do you get the idea that the imports are not paid for?
Hey we can just run up the plastic forever with no end in sight
Are you suggesting that the trade deficeit is somehow contributing, or even causing the budget deficeit of the federal government? If so, explain.
What drives a lot of this is the idea of economics as zero-some; something trade protectionists share with Communists, who are their intellectual kin. I.E. One country only becomes wealthy by impoverishing another country.
I included reference links to support my assertions.
You have not.
Ugghh, make that "Zero-sum" not "Zero-some."
Who do you think pays for the tariff? The American Customer!! You are thinking that taxing Americans and enriching Federal coffers means that "we make money on this"? Ted Kennedy would be so proud of you!!
No. Consumers by cheap imports because Americans are price driven with 99% of their purchases.
Somehow, after reading the title of the thread, I knew it was posted by Willie.
Didn't even have to click on it.
I guess there is something to be said for consistency...
And what has happened to the American standard of living in those thirty years? Has it suffered? No.
No ? I kinda remember that in 1975 a blue collar worker on one paycheck could buy a house, have health insurance, go away on vacation, send a kid to college, and retire on a pension. I kinda remember that while adjusted for inflation the prices of cars have remained pretty constant, auto loans were three years then but are six years now.
Ah... but you are presenting economic facts... williegreen and oceanview lose you there.
What has the trade deficit been as a percent of GDP over the past 30 years?
if Japan had mantained an artificial currency peg, if they had slave wages and low living standards - the trade situation with them would be far far different then it is today. Toyota employs 200,000 americans in the auto business. China is draining US jobs in manufacturing and technology.
Horse manure. I pay off my plastic debt cards, then rack it up again, just like most everyone else. Just because a few people can't manage a household budget, doesn't mean it's an economic indicator for the whole nation.
As far as everything I (we) buy being made in China, that's B.S. as well. I buy cheap stuff that's made in china, consumable goods, like coffee makers etc that have a short lifespan. I buy Good stuff that I expect to last from either the USA, Canada, Europe. which may or may not contain parts from various other places in the world.
Finally, EVERYTHING I buy here, I buy from a American retailer, pay American federal and state taxes on it. They employ American people (I insist) and pay their salaries in American Dollars.
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