Fear and ignorance.
Posted on 03/20/2008 2:56:09 AM PDT by Fennie
The Bush administration forecasts a $410 billion federal budget deficit for this year, an indication that, as the US saving rate is approximately zero, the US is not only dependent on foreigners to finance its wars but also dependent on foreigners to finance part of the US government's domestic expenditures. Foreign borrowing is paying US government salaries--perhaps that of the president himself--or funding the expenditures of the various cabinet departments. Financially, the US is not an independent country.
A troubled currency and financial system and large budget and trade deficits do not present an attractive face to creditors. Yet Washington in its hubris seems to believe that the US can forever rely on the Chinese, Japanese and Saudis to finance America's life beyond its means. Imagine the shock when the day arrives that a US Treasury auction of new debt instruments is not fully subsribed...
I don’t know where this hostility toward capitalism comes from. One would think that even a paleo would understand where that leads—counterpunch and lib think tanks notwithstanding.
“Rudeboy’s graph showed that reducing tariffs has also worked very well since the end of WWII.It’s a very technical term. “
Rudeboy’s graph does not show that. What if you stick government social security payments on that graph. They’d show growth, too. Would that mean that more SS payments are the way to grow the economy?
“You’d have to add imports and exports together to get total trade.”
There would be some GDP stimulus from the distribution and sale at retail of imports. But they doubtless stimulate the economy much less than exports or domestically produced and consumed products. And, since we have a $750 billion trade deficit, our trade deficit is taking all the benefits of domestic production out of our GDP, plus the manufacturer’s profit.
Welfare payments stimulate the economy. And that’s about the quality of stimulus we get from imports, where much of the benefit of the economic activity remains in another country, about $750 billion of it as of now, and growing.
What welfare payments and imports do is direct capital into activities that give a lower return in the form of economic activity than domestic production and labor involved in that production (as opposed to welfare recipients).
Net imports slow the rate of growth of our economy, and rudeboy’s graph shows that our trade policies slow our economic growth and reduce rather than increase GDP due to less economic activity associated with imports as opposed to domestically produced goods. That’s what we have as long as we have trade deficits, which we have in most of that graph.
The graph is bogus. There is no way imports should be treated as equal to exports because the economic activity generated by the two within the US are very different. And when imports exceed exports, you are reducing GDP, both in the GDP calculation and in terms of domestic economic activity.
Rudeboy’s graph does not show that.
And your graph did not show that protectionism caused our GDP per capita to grow either. Glad we cleared that up.
And when imports exceed exports, you are reducing GDP, both in the GDP calculation and in terms of domestic economic activity.
Show me how you calculate GDP.
Fear and ignorance.
“A wall on the border favors capital and management? Then why do so many in management support illegal immigration?”
I think you’re serious with that question.
There are two ways for corporations to use the world’s cheapest labor.
1. Have the freedom to move capital and production to where the cheap labor lives. Corporations can definitely do that, and have done it like crazy.
2. Bring the cheap labor to the production facility. Some management does this illegally, some doesn’t. But they’d like to which is why they support illegal immigration and amnesty.
But, as of now, we do have the free movement of capital to the cheap labor in Asia, Mexico and elsewhere. So management can access cheap labor to a great extent. They just can’t legally bring it into the US to the extent they’d like.
We do not have the free movement (legal) of labor in most of the world. To have that would require open borders worldwide.’
The present situation greatly favors capital over labor as to the freedom to move about in the global market.
I'm against open borders. So it doesn't bother me that we don't have free movement (legal) of labor in most of the world.
The present situation greatly favors capital over labor as to the freedom to move about in the global market.
So you'd like to restrict capital?
Toddsterpatriot,
The free movement of labor is debated here and there, and the real free trade purists say it is necessary to have true free trade and free markets:
You could read about it forever. And I am definitely against open borders. But scratch around I think you’d find many politicians and businessmen (and presidents and presidential candidates) who buy into the who “free” ball of wax. They won’t say it, but that’s why so many favor amnesty and eventual open borders.
Better be careful who you support in the name of free trade unless you also desire open borders.
PCR is certifiably mad.
False.
I guess I'm not a free trade purist. Don't tell the FR paleos.
Better be careful who you support in the name of free trade unless you also desire open borders.
Be careful who you support in the name of protectionism, unless you desire higher taxes, government health care and open borders.
“So you’d like to restrict capital?”
I think capital should be viewed the same as labor. Both should be viewed as to the favorable or unfavorable impact on the US economy. Things like national security, critical industries, and yes, impact on workers should be taken into account.
“Be careful who you support in the name of protectionism, unless you desire higher taxes, government health care and open borders.”
All the choices for president are poor this time around. My only enthusiastic vote will be to re-elect Jeff Sessions.
Oh my.
“Oh my.”
And here we have a long paper on the causes of The Great Depression from the Hoover Institution and not a word about Smoot-Hawley. Maybe you need to clue them in?
http://www.hoover.org/publications/policyreview/3476271.html
Read it. You might learn what really caused and prolonged the Great Depression.
You say you studied economics but didn’t learn of Smoot-Hawley until NAFTA?
That’s really very pathetic. Perhaps you could get a refund for your education, if you paid for it.
In 1930, the Republican-controlled House of Representatives, in an effort to alleviate the effects of the... Anyone? Anyone?... the Great Depression, passed the... Anyone? Anyone? The tariff bill? The Smoot-Hawley Tariff Act? Which, anyone? Raised or lowered?... raised tariffs, in an effort to collect more revenue for the federal government. Did it work? Anyone? Anyone know the effects? It did not work, and the United States sank deeper into the Great Depression. Today we have a similar debate over this. Anyone know what this is? Class? Anyone? Anyone? Anyone seen this before? The Laffer Curve. Anyone know what this says? It says that at this point on the revenue curve, you will get exactly the same amount of revenue as at this point. This is very controversial. Does anyone know what Vice President Bush called this in 1980? Anyone? Something-d-o-o economics. "Voodoo" economics.
I shudder to think of any economics student who has never heard of Smoot-Hawley at the time of graduation.
But you’re right, it’s a pop-culture reference too.
I learned about it first in high school, then again in college.
“That’s really very pathetic. Perhaps you could get a refund for your education, if you paid for it.”
Like I said above, you need to share your genius with the folks at the Hoover Institution. They wrote that long article on the Depression and never mention Smoot-Hawley.
S-H was drug out of the dust bin of economic history to help sell NAFTA, and given an importance beyond anything it had ever enjoyed before.
That's absurd.
I got my degree in the 80s, and we spent plenty of time on it. High school too.
I thought you’d taken a break.
Are you aware that ALL economic activity took a nose dive during the Great Depression, not just foreign trade? Whatever happened in trade activity was just a reflection of the general economic depression caused by the new Fed’s decreasing the money supply by around 30%. And, you’ll like this, it was Milton Friedman’s work on monetary theory that helped explain the Fed’s role in causing it.
Read the article and expand your horizons beyond Smoot-Hawley.
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