Posted on 08/03/2018 10:08:33 AM PDT by Rashputin
Why is Trump fighting the trade war? Here's why.
Critics of Trump's trade policies think everything is okay if we don't do anything. The chart below shows that everything is not okay if we don't do anything.
This is a chart of capital spending in the U.S. from 1968 through to the present. It is a straightforward presentation of monthly data from the Commerce Department. There is nothing clever, nothing tricky about this presentation or about the time frame chosen. The Commerce Department started this series in 1968. It superseded another series on capital spending.
Source: U.S. Department of Commerce.
Why is this chart important?
It is a death sentence for America.
Although it is a single series of data, the chart is essentially in two parts, split in the year 2000. There is no manipulation to achieve this effect. This is how the data lay out, which is why this chart is so significant.
(Excerpt) Read more at americanthinker.com ...
To cut taxes, we have to cut the welfare rolls.
The people on the welfare rolls will need jobs to go to.
Making more stuff here will provide for the needed jobs.
Creating jobs here will boost FICA tax revenue, helping maintain the ability to pay Social Security benefits.
“What the author seems to be ignoring here is that U.S. GDP has grown considerably even during this period when capital investment has stagnated or declined. How does he explain this?”
Every time a new drug gets FDA approved, insurers must buy it, by law. States must buy it, by federal law.
My county now requires blower door testing on new houses, by a certified person. It probably adds a few hundred dollars of cost to each new house.
Sarbanes-Oxley added big expenses to businesses.
GDP is a crude measure of economic health, except for governments seeking tax revenue.
During the NAFTA propaganda campaign, the supporters were adding in the value of those factories to the export stats to show how much Mexico was "buying" from us.
“But another is simply that the dollar is so versatile.”
That is the principle reason. It’s a form of modern day Mercantilism. The dollar is the new gold.
Back in the 1800s when gold was the universal currency, all the countries, especially the more powerful ones wanted to amass gold so they pushed to be big net exporters of manufactured goods.
That did two things. It filled the country’s coffer with gold AND it provided good jobs for its citizens.
Same thing is happening today with China, Germany, Japan, Korea etc.
But what about the US? Since we are the source of dollars, unlike gold, we can print all we want, shouldn’t we be happy that those countries give us all their nice products for our pieces of papers? Where’s our downside in that?
The downside is that we get fat lazy and complacent. And if down the road the tables reverse and we can’t continue the current practice of trading paper for goods then we’ve got a problem. I think you’ve got to keep that risk in mind but at the same time we could be managing that risk without shutting down foreign trade. One way to do it would be to eliminate the BUDGET deficit because the fact that China can change its dollars for AMERICAN sovereign debt makes it easier for them to run a trade surplus with us. If they had to actually hold dollars then they would quickly realize that running a surplus is also not a good policy.
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