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When money is taxed away (from anyone), it is not available for legitimate economic purposes.
That would possibly be true if the government took all its tax receipts and put them in a coffee can. But that's not what it does. Instead, it turns right around and spends those dollars right back into the very same private sector that they came from. Most times they give back even a little more than what was taken away. In fact, right now about 25% of the average private sector salary is directly or indirectly attributable to public sector spending. I guess you don't consider paying the average private sector worker to be a legitimate economic purpose.
Then why haven't you done it? The reason why is that the jobs gained from trade liberalization are widely dispersed. There's ten here, twenty-eight over there, sixteen down the road a piece. They pop up at thousands of different sites owned by thousands of different companies and they don't come with any official stamp "This Job Created by Globalization" on them. Individually, they're hard to see and they're hard to find. On the flip side, plant closings are easy to spot. Whole clumps of jobs can be seen as lost all at one time. And of course they come with all the usual stories of a whole way of life being lost as a once prosperous town sinks into economic decay as the result of globalization. So you soak that stuff up, but don't bother to look any further. As the result, your views of anything even marginally related to GATT/WTO and NAFTA are unduly colored by extrapolation from false and incomplete information.
Per your Levi Strauss story, let's look at manufacturing for a bit. Real US wages in manufacturing increased by 14.4% in the decade after NAFTA. In the decade before, they had increased by 6.5%. But all those jobs lost, you say? Yes, it's quite true that the US has lost manufacturing jobs since the mid 1990's. It's also true that ALL of the world's top twelve manufacturing economies have lost manufacturing jobs over that time period, while actual manufacturing output has soared. China in that time period has lost more manufacturing jobs than the US has, while the actual US loss of jobs has only been just about average for the Top Twelve. It is also true that the US remains by far the world's largest manufacturing economy, producing about 24% of all the output of those twelve largest manufacturing countries. Second-place China has just about ten times the number of manufacturing workers as we do, and they would still need to increase their output by one-third in order to match us. Simply put, manufacturing as a source of employment is shrinking not just here, but everywhere around the world, just as agriculture once did perhaps now a century or more ago. You'll need to wrap your head around that sort of thing before you're going to have any clear picture of what's actually going on.
Tariffs, quotas, subsidies and other such restrictions on trade do one thing. They raise the real cost of goods and services to all consumers. This depresses aggregate demand, and decreasing demand means fewer jobs. You think you'd rather pay $60 for a pair of US-made jeans than $40 for a pair of slave-made Chinese jeans and that tariffs will ultimately let you do that. But that's not what happens. On the day the tariff goes into effect, you simply pay $60 for the same pair of slave-made Chinese jeans that you could have bought the day before for $40. You'll have to wait for there to be any US-made jeans available. How long will it take? Well, ask youself how many companies are likely to sell some bonds that they'll be paying off for 20 years in order to raise the capital needed to acquire or build and equip a jeans-making plant based on the gamble that nobody is going to tinker with the tariff in the meantime. Tariffs are notoriously short-lived. The people hurt by the tariff (the manufacturers of the things you would have bought with the extra $20 you sunk into that new pair of Chinese jeans) start lobbying the government over how the tariff is killing them and all their US jobs, and poof, the tariff disappears. And any jeans-manufacturing operation launched on the basis of the tariff being in place is basically wiped out. Businesses don't trust tariffs, hence they may not react to them in the way that your "it's not hard at all" approach might suggest.
Trade imbalances result from the combination of a whole bunch of factors, but it is naive to believe that any country can successfully peg and maniuplate its currency. The increasing impossibility of the task was what brought about the death of fixed exchange rates to begin with as everyone simply went on the float and washed their hands of the whole mess. China is the only major economy that has seriously tried to maintain a peg since, and their ability to do so even in their heavily regulated world grows smaller every day.
Companies don't make location decisions based on labor costs. They don't make such decisions based on taxes. They make those decisions based on profitabilty, which is again a combination of dozens of factors. Education level and reliability of the local workforce. Political stability in the region. Proximity to efficient transportation networks. Reliability of access to suppliers. Ability to protect intellectual property. The list goes on and on. Nobody moves from one corner of the world to another without looking at the situation from every possible angle. A+B=C does not apply.
The information about your personal situation suggests that you are indeed producing a luxury good for sale into an upscale niche market that has been adversely affected by the economic downturn. Luxury goods and upscale niche markets are known to be susceptible to disproportionately adverse effects during economic downturns. NAFTA and the WTO have nothing to do with this. It's been going on for centuries.
The only thing true that Saggy has ever said-
"companies make decisions based on profitability"
Quite true- That is why companies with the same labor costs and overhead for power and raw materials move to mexico- lower corporate taxes and this higher profit.
Based on 2007 data (still the latest available)...
In these countries, government spending is at least 50% of GDP:
France, Sweden, Denmark, Iceland, Malta, Qatar, Kuwait, Belgium, Norway, Netherlands, Italy, Austria, Finland, Portugal, United Kingdom.
In these countries, government spending is 40-50% of GDP:
Germany, Canada, Spain, New Zealand, Israel, Australia, Ireland, Saudi Arabia.
In these countries, government spending is 30-40% of GDP:
Switzerland, Luxembourg, South Africa, Japan, United Arab Emirates
In these countries, government spending is 20-30% of GDP:
India, Russia, China, Poland
In this country, government spending is less than 20% of GDP:
United States of America
............... And in this country (The USA) debt is at $12.6 trillion and is expected to increase $1.2 trillion per year "as far as the eye can see".
Now Sag, didn't your mother ever tell you that just becuase everyone else is running off a cliff, that doesn't mean that you should do so as well? Your comparison is silly, as usual, as it compares incompetance to incompetance. How about a comparison of incompetence to good sense? I note that your comparison was in 2007, far before the lunacy of Obama spending came about and we have deepened the hole.
Now your boys, the CBO, estimates that the debt will approach $25 trillion by 2020. At that time, with an interest rate of 4%, the annual payment to service the debt is $1 trillion. If interest rates are 8% (which is very likely given the projected decline in the ability of the US to attract new lenders), that annual amount to service the debt is $2 trillion, which is 85% of projected revenues. At that point, the debt is unsustainable.
So the Saggy plan is to keep spending to the point that the debt cannot be serviced, drive the nation into insolvency and the world into financial anarchy. I would expect nothing less of "planning" by a liberal. Liberals follow the mantra of "we will burn that bridge when we get to it".
[quote=hawkeye2009;13857069i So the Saggy plan is to keep spending to the point that the debt cannot be serviced, drive the nation into insolvency and the world into financial anarchy. I would expect nothing less of "planning" by a liberal. Liberals follow the mantra of "we will burn that bridge when we get to it"..[/quote]
It would appear that you have completely ignored the Reagan/Bush41/Bush43 antics which brought the annual interest payments from about $40 billion to nearly $400 billion. Do you get it?? Now, before we spend a penny each year we must pay nearly $400 billion in interest on the total debt. For comparison we spend about $100 billion on education and less than that on our infrastructure. You didn't think Communist Chinese banks were going to give us 0% interest rates did you? You people are numb or at least you pretend to be.
Bill Clinton had a Republican majority but he still raised taxes mostly on the wealthy and to date has the best fiscal picture during my lifetime which stretches back to the mid 1930's.
No, the tax increase on the wealthy was passed under a Democratic majority in 1993. In 1990 under H.W. Bush tax brackets were consolidated to only 3; the top rate was 31% and began at a single income of $49k and continued to infinity.
Clinton's tax reform (OBRA93) broke the tax brackets back into 5. The previous income bracket of 31% was broken into three parts; 39.6% for individuals making over $250k, 36% for those making $115-250k, and 31% for $86-115k. The lowest two brackets remained the same. Not really that big of a deal numerically speaking, and deficits continued to reign until the height of the business cycle in the late 90s. One particular tax credited with generating the income to create a surplus was an enormous fuel tax hike in 1998.
Quote:
Originally Posted by Melvin.George
You folks are amazing. You just don't understand that the debt quadrupled and then doubled again after Republican tax cuts with half of the benefits going to the upper 1% of taxpayers.
Bush's 2001 tax cuts only dropped the rates by 1% across the board, except for the lowest income bracket. A new bracket was created at the bottom, effectively giving the poorest tax payers a 5% tax cut, compared to the 1% everyone else received.
The 2003 tax cuts dropped the top rate by 3.6%, and the rest by 2% except for the lowest bracket, which was unchanged.
The issue seems to be too few brackets to handle income disparity among the top tier as opposed to the actual rates themselves..
Quote:
Originally Posted by Melvin.George
You didn't think Communist Chinese banks were going to give us 0% interest rates did you?
China holds less than 8% of the public debt. Even so they hold our debt primarily in the form of bonds, which have a set time before they can be cashed in. In fact, just about every country on the planet holds US bonds.
That would possibly be true if the government took all its tax receipts and put them in a coffee can. But that's not what it does. Instead, it turns right around and spends those dollars right back into the very same private sector that they came from. Most times they give back even a little more than what was taken away. In fact, right now about 25% of the average private sector salary is directly or indirectly attributable to public sector spending. I guess you don't consider paying the average private sector worker to be a legitimate economic purpose.
Of course, but when money circulates for no value added, it is counter-productive, and government spends so many times more money than the value it gets, that it is extremely damage to our economy - as the current state of affairs shows under the triad of Gluttonous Government (Obama, Reid and Pelosi).
It would appear that you have completely ignored the Reagan/Bush41/Bush43 antics which brought the annual interest payments from about $40 billion to nearly $400 billion. Do you get it?? Now, before we spend a penny each year we must pay nearly $400 billion in interest on the total debt. For comparison we spend about $100 billion on education and less than that on our infrastructure. You didn't think Communist Chinese banks were going to give us 0% interest rates did you? You people are numb or at least you pretend to be.
Blame, blame, blame.
That is all that is important to liberals, as solutions escape them. The liberal blame for debts is analagous to passengers, lost at sea, being consumed by sharks and being more interested in how the boat sunk, rather than avoiding being eaten.
Solutions-
1. Cap the budget annually to 75% of the previous year's revenues
2. Cut military and social spending 25% across the board
3. allow line item veto
4. eliminate ear marks
5. make lobbying illegal
6. make it a federal crime to be a part of private contracting to the federal government within ten years of holding a position in a presidential administration or a member of the senate or congress
7. Repeal NAFTA
8. Eliminate "most favored nation" status for China
9. Allow unlimited domestic coal and oil exploration with a 5% tax on all energy ear marked for domestic alternative energy INFRASTRUCTURE.
10. Allow the states to administrate and manage social security and medicare benefits for thier citizens - all "payroll" taxes for each citizen goes to the state, not the feds.
China holds less than 8% of the public debt. Even so they hold our debt primarily in the form of bonds, which have a set time before they can be cashed in. In fact, just about every country on the planet holds US bonds.
LOL!!!
Why do you quote a percentage? The facts are that after Bush doubled our debt we now owe China nearly a trillion dollars. He was the first president in the history of our country to borrow from China. Now we owe them about $900,000,000,000. That doesn't even call to bear the half a trillion we lose to them each year in trade deficits. Face it! The Republicans have screwed over the ordinary man in this country ever since pretty boy Reagan cut taxes and began to plunge the country into debt.
And in this country (The USA) debt is at $12.6 trillion and is expected to increase $1.2 trillion per year "as far as the eye can see".
Would that be according to one of your favorite whackjob internet financial guru wannabe's again, or did you just make that up? It's certainly not in line with CBO's recent projections which show the deficit falling to a level still above $1.2 trillion in FY2011, but not hitting that level again until FY2020. It sees the middle years of the coming decade running in the low to mid-700's.
Quote:
Originally Posted by hawkeye2009
Your comparison is silly, as usual, as it compares incompetance to incompetance. How about a comparison of incompetence to good sense?
The comparison shows the gross difference between your nonsensical outlier ideas of "over spending" and what 99% of the rest of the financially competent world actually thinks on the matter.
Quote:
Originally Posted by hawkeye2009
I note that your comparison was in 2007, far before the lunacy of Obama spending came about and we have deepened the hole.
2007 is the latest available data, as noted. Of course, you could get 2009 data for the US and see that federal outlays were $3,516 billion while GDP was $14,256 billion, meaning that we have shot up to 24.7% as the result of the declining GDP and emergency stimulus expenditures caused and made necessary by that other guru of yours who pretended to run what was apparently a brush ranch in Crawford, Texas.
Quote:
Originally Posted by hawkeye2009
Now your boys, the CBO, estimates that the debt will approach $25 trillion by 2020.
Aw! You just missed it by $5 trillion.
Quote:
Originally Posted by hawkeye2009
At that time, with an interest rate of 4%, the annual payment to service the debt is $1 trillion. If interest rates are 8% (which is very likely given the projected decline in the ability of the US to attract new lenders)...
And whose projection have you decided to use for that???
Quote:
Originally Posted by hawkeye2009
...that annual amount to service the debt is $2 trillion, which is 85% of projected revenues.
Projected revenues for FY2020 are actually $4,416 billion. Even your grossly exaggerated $2 trillion is not 85% of $4.4 trillion.
Quote:
Originally Posted by hawkeye2009
At that point, the debt is unsustainable.
No, at that point your fumbled research, ridiculous math, and bogus arguments are unsustainable.
Would that be according to one of your favorite whackjob internet financial guru wannabe's again, or did you just make that up? It's certainly not in line with CBO's recent projections which show the deficit falling to a level still above $1.2 trillion in FY2011, but not hitting that level again until FY2020. It sees the middle years of the coming decade running in the low to mid-700's.
The comparison shows the gross difference between your nonsensical outlier ideas of "over spending" and what 99% of the rest of the financially competent world actually thinks on the matter.
2007 is the latest available data, as noted. Of course, you could get 2009 data for the US and see that federal outlays were $3,516 billion while GDP was $14,256 billion, meaning that we have shot up to 24.7% as the result of the declining GDP and emergency stimulus expenditures caused and made necessary by that other guru of yours who pretended to run what was apparently a brush ranch in Crawford, Texas.
Aw! You just missed it by $5 trillion.
And whose projection have you decided to use for that???
Projected revenues for FY2020 are actually $4,416 billion. Even your grossly exaggerated $2 trillion is not 85% of $4.4 trillion.
No, at that point your fumbled research, ridiculous math, and bogus arguments are unsustainable.
Oh I forgot, Saggy. You are just interested in spin and ignore all facts that do not support your liberal notion of "spend to the point of insolvency". Great "plan"!
Does anyone in Washington know how to read anymore, or do you all just tell lies to each other? Saggy, all you do is put your liberal BS spin on everything and ignore all data from the CBO. When your "solutions" are to spend into eternity and ignore the warnings of the CBO, one must be forced to ignore all rational accounting data and retreat into the fantasy land of liberals, in which infinite spending can and will go on forever, and there will always be a full government trough. Where the heck did you libs go to school? Thank God I prevented my daughter from going to GW out there in liberal nut job land.
Yes, Sag, your boys say $20-$25 trillion in debt by 2020. At 4% interest on our debt, that will be $1 trillion per year JUST TO SERVICE THE DEBT! At 8%, that goes up to $2 trillion, which essentially consumes the entire federal budget (85%). No more freebies for the dems to give to dead beats, there Sag. The party is over. You and your liberal buddies are just rearranging the deck chairs on the Titanic and having the last big blow out before the boat sinks. Liberalism at its best! The good thing is that when the trough is empty, there will be no more liberals. It is not that far away and is something I just can't wait for!
Last edited by hawkeye2009; 04-22-2010 at 07:04 PM..
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