The Silent Economic War Being Waged Against America

Economy In Crises ^ | 7/31/16 | George Barlow

[Organic Panic]

I am a free trader. But the USA is not a free trade country. We have a behemoth in DC that does all it can to hurt US based business.

[Brian Griffin]

“If we had a 15% corporate tax rate”

Corporations have plenty of money.

The Dow Jones is about 30 times higher than it was in 1982. That’s because corporations are making money like crazy.

And even if they didn’t have enough money, they could issue bonds or wait ((1-.15)/(1 -.28))-1 [18%] longer to build the factory.

They seem to have had enough money to build factories in China when they paid higher US level wages.

[Gen.Blather]

I worked for a company with one of the most advanced automated productioin families in the world. A month after we lost our biggest contract it was scrapped. The reason? The county taxed us on the original purchase value. If we could have kept it we might have made it profitable in a year or so and gone back to full employment. But no, taxes...

[Alberta's Child]

Yep — Malcolm McLean.

[Brian Griffin]

“I am a free trader.”

I’m a financially balanced/barter-based man.

Free trade simply doesn’t work in the face of Chinese/Japanese/Korean nationalism that favors the purchase of domestically-made stuff.

[Brian Griffin]

This is my duty/balanced trade proposal:
http://www.freerepublic.com/focus/chat/3504358/posts?page=12

[amihow]

It is the Globalist’s dream to destroy the first world into the one New World Order a la the Bushes and the Cruzes et. al. .

[itsahoot]

There is a lot of weapons systems being built in the US by General Dynamics, GE, Raytheon, Boeing, and other companies.

Where are the electronics components actually made? Do we make the steel, or any number of alloys required for modern warfare?

[econjack]

Exactly! What would happen if we cut corporate taxes to 15%? Now, every corporate investment becomes 20% more profitable. Apple might now say: "We can build the plant in the US now that's it's 20% more profitable." The same would happen with other industries and products. US employment and production would soar.

And you're right about resource location, too. Why are steel mills located in PA when the iron ore is in MN? Because for every ton of ore it took 12 tons of coal to process it. The US is fortunate to have virtually every natural resource it needs. However, those resource advantages are distorted by the current tax policies.

[Alberta's Child]

And why are all of the new auto plants being built in southern U.S. states instead of the "Rust Belt" states? One reason is that steel isn't nearly as important to the auto industry anymore. Nowadays, access to a major port or intermodal rail terminal -- for inbound deliveries of parts and electronic components -- is more important than proximity to steel mills.

Keep in mind that China and India alone have almost 2.5 billion people, so their customer base is enormous compared to the U.S. Over the coming decades, Asia will have a great advantage over the U.S. when it comes to manufacturers serving a local customer base for this reason alone.

[econjack]

They seem to have had enough money to build factories in China when they paid higher US level wages.

Really? What US company built a plant in China? I know a lot of plants that were built with purchase guarantees by US companies, but none where a US company owns a plant in China.

One reason Ford, Carrier, and many other companies build plants in (non-Communist) countries is because they can shelter income from US taxes. True, wage demands in the US are also a factor, but that's an issue for the unions to consider when they demand higher wages. Which is better: $55/hr and no job, or $40 and a 40 hour/wk job? A lot of the union issues are the result of years of shooting themselves in the foot.

[econjack]

Where are the electronics components actually made? Do we make the steel, or any number of alloys required for modern warfare?

Actually, a lot of the components are produced by US companies like Atmel, Texas Instruments, Mallory, AMD, Intel, and many other firms. The US steel industry directly employs about 142,000 people in the United States and produces about 90 million metric tons of steel a year. Add to that all of the steel recycling that has increased over the years and domestic steel production is actually quite high.

In 2014, U.S. aluminum shipments were up 36 percent compared to 2009

(See: http://www.usglassmag.com/2016/08/report-china-not-to-blame-for-falling-u-s-aluminum-production/)

There's been a lot of disinformation about the decline of US "base" industries that simply aren't supported by the facts. Often unions twist the facts to blame China for their problems when a lot of it has to fall at their doorstep and unrealistic wage demands.

Now, what is going to cause business to modernize more quickly: Protective tariffs that let them slide by with old technology, or the realities of the marketplace and the need for tax policies that foster growth rather than impede it?

[itsahoot]

Smooooot. Milton was wrong and it may be proved soon. I repeat there is not one weapon system built totally within the US.

[econjack]

Ahh...we worked in a weasel word in:

Milton was wrong and it may be proved soon.

Anytime someone uses the word "may" in stating a position, they usually have no position at all because that word is consistent with everything, anything, and nothing. Until he is proven wrong, your statement is moot.

I repeat there is not one weapon system built totally within the US.

Really? Another weasel word thrown in so you can point to a plastic fitting on a toilet on a US carrier and say "Ah-HA!". What about the MQ9 Reaper drone, the Laser Avenger, the SSN(X) Navy attack submarines, and the ADAPTIV Cloaking system? Boeing and Northrup-Grumman are working on systems that don't even have a public name yet, so I kinda doubt the Chinese are part of the production process.

[PapaBear3625]

We face the highest corporate tax rates in the world. If you want to fix the problem rather than putting lipstick on the pig, you need to let corporations invest more in their businesses and that means lower corporate tax rates and perhaps investment credits

To start out, we should take a hard look at depreciation rules and inventory taxes. Businesses would be more likely to invest in new equipment if they could expense the equipment rather than having to depreciate it over time. Businesses should also not have to pay tax penalties for holding a reasonable amount of inventory and supplies.

[i_robot73]

>
Let’s fix the problem for once rather than hiding it. After all, who gets the tariff money? The very entity that did nothing to earn it: the gov’t. Raising tariffs means higher prices for us, and little or no additional production or employment in the US. The only winner is the gov’t, as it has more of our money to buy your votes. Think about it.
>

Spot on, but it would appear many of the replies are following in the (R)NC\GOP(e) footsteps: Nibble around the edges.

People! It is the SIZE and SCOPE of Fedzilla. Strip it of its spending, enforce the Constitution, and the corp\factories\etc. would flock back to the U.S. in a heartbeat. No more ‘”law” by fiat’ (regulations, insane tax code and % (even if kept, the rates for taxation to pay for LAWFUL govt would be PENNIES vs. today), unions, EPA, OSHA, O’Care, etc.

THEN talk about tariffs and the like.

[itsahoot]

Ahh...we worked in a weasel word in: Milton was wrong and it may be proved soon.

May depends on Trump not on the premise.

[econjack]

Agree, especially on the inventory tax. When I was teaching in Omaha, every February there was an endless stream of cattle moving out of Omaha, mostly by truck across the river. A day later, they all returned to the feed lots. The reason: An inventory tax, which included cattle. Much wasted time, effort, and cost for nothing.

[central_va]

Bump.