Posted on 08/09/2007 9:03:51 PM PDT by gpapa
Pop quiz. Which has been most important in reducing poverty over time: a) taxes, b) economic growth, c) international trade, or d) government regulation?
We know what our readers would say. But lest you think American young people are slouching toward serfdom, you'll be pleased to know that 53% of U.S. high school seniors also answered "b." The latest version of the National Assessment of Educational Progress (NAEP) asked this question, among others on economics, and the results will not please members of the Socialist International, or for that matter the Senate Finance Committee.
Since its founding in 1969, the NAEP has become something of an annual exercise in American educational masochism. Last year, only 54% of students met NAEP's "basic" standard--the equivalent of a passing grade--on the science test. The previous year tested history; a mere 47% passed. But when knowledge of economics was tested this year, well, let's just say the supply curve shifted. NAEP reported this week that 79% of twelfth graders passed this first-ever national economics test. Holy Hayek.
(Excerpt) Read more at opinionjournal.com ...
why not c?
Isn’t congress setting the bar kind of low?
International trade, or domestic trade for that matter, will only help reduce poverty if it results in economic growth. You can have international trade without growth, though healthy trade, whether international, domestic, or both, generally makes growth more likely.
what about intl trade between a rich country, even with no growth, and a poor country? just opening up trade would be the easiest way to reduce global poverty
I’m all for trade, but international trade is an indirect answer to the question. Economic growth is the direct answer. International trade reduces poverty when it results in economic growth.
If we have a certain level of international trade today, cutting it would reduce growth and increasing it would generate more growth. Maintaining the level does nothing to increase growth, but it is international trade.
The outcome of economic growth is general prosperity. Prosperity is desireable, right? So, things that hinder prosperity are undesireable.
Increased trade, whether domestic or international, facilitates growth. This is why steps to restrict commerce must necessarily be bad.
Tariffs and quotas are not the only way government restricts commerce. Taxes on energy and carbon are pretty good tools to restrict commerce. Price controls and price mandates (e.g., minimum wage) restrict commerce. Any attempt to control commerce restricts it.
.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.