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Of course it makes sense. We the people get real goods in exchange for vapor fiat. And the goods are cheaper than we can produce here, so all our consumers have money left over to save or spend on other things.
The problem is what to do with the displaced workers. Without more central interventions they will not so simply have to adapt.
Of course, the Chinese don't want just green pieces of paper. It would be wonderful if they did. That is why that money gets reinvested, much of it right here in the USA. It is also used to help finance our deficits. Driving down the interest we pay on the debt. Considering we have a twenty trillion dollar debt that is pretty important.
Milton Friedman, when it comes to economics, IMO, there is no better source.
From that article:
Quote:
A fourth argument, one that was made by Alexander Hamilton and continues to be repeated down to the present, is that free trade would be fine if all other countries practiced free trade but that, so long as they do not, the United States cannot afford to. This argument has no validity whatsoever, either in principle or in practice. Other countries that impose restrictions on international trade do hurt us. But they also hurt themselves. Aside from the three cases just considered, if we impose restrictions in turn, we simply add to the harm to ourselves and also harm them as well. Competition in masochism and sadism is hardly a prescription for sensible international economic policy! Far from leading to a reduction in restrictions by other countries, this kind of retaliatory action simply leads to further restrictions.
We are a great nation, the leader of the world. It ill behooves us to require Hong Kong and Taiwan to impose export quotas on textiles to “protect” our textile industry at the expense of U.S. consumers and of Chinese workers in Hong Kong and Taiwan. We speak glowingly of the virtues of free trade, while we use our political and economic power to induce Japan to restrict exports of steel and TV sets. We should move unilaterally to free trade, not instantaneously but over a period of, say, five years, at a pace announced in advance.
Few measures that we could take would do more to promote the cause of freedom at home and abroad than complete free trade. Instead of making grants to foreign governments in the name of economic aid–thereby promoting socialism–while at the same time imposing restrictions on the products they produce–thereby hindering free enterprise–we could assume a consistent and principled stance. We could say to the rest of the world: We believe in freedom and intend to practice it. We cannot force you to be free. But we can offer full cooperation on equal terms to all. Our market is open to you without tariffs or other restrictions. Sell here what you can and wish to. Buy whatever you can and wish to. In that way cooperation among individuals can be worldwide and free.
How do taxes, fewer choices and higher prices make us better off?
Ultimately forcing China to "play fair" in trade agreements benefits us all in the form of lower prices and a more vibrant US manufacturing and ag industry.
To maintain the current path will result in the financial ruin of the US. Trump and the US are in a position of strength, as the Chinese economy is far more dependent on US markets than vice versa. Allowing the Chinese to continue unfair trade policies will lead to higher unemployment and higher prices in the US.
Someone had to do something- Trump is the only POTUS who has had the guts to do anything and has not been bought and sold by China.
Ultimately forcing China to "play fair" in trade agreements benefits us all in the form of lower prices and a more vibrant US manufacturing and ag industry.
To maintain the current path will result in the financial ruin of the US. Trump and the US are in a position of strength, as the Chinese economy is far more dependent on US markets than vice versa. Allowing the Chinese to continue unfair trade policies will lead to higher unemployment and higher prices in the US.
Someone had to do something- Trump is the only POTUS who has had the guts to do anything and has not been bought and sold by China.
^^^^^This. All previous Presidents just kicked the can down the road, not wanting to do the heavy lifting Trump is doing. It's not just China, but they are the elephant in the room. It is Europe, other parts of Asia (Japan, etc), South America, Mexico, etc.
Fair for whom? The manufacturer, owners or shareholders? Shipping companies? The Mexican worker? Importers? American consumers?
Right now it sounds like we are trying to make in more 'fair' for our blue collar workers. So without other central interventions, our consumers as a whole might lose out.
Where do you suppose the money used by Americans to purchase products comes from? Americans need to be employed in order to afford consumer goods.
Of course American investors have already been stuck with a stagnant stock market for nearly a year and a half despite running nearly trillion dollar annual deficits and deregulations. We should have had double digit annual returns. I'm out an estimated 50K.
Of course, the Chinese don't want just green pieces of paper. It would be wonderful if they did. That is why that money gets reinvested, much of it right here in the USA. It is also used to help finance our deficits. Driving down the interest we pay on the debt. Considering we have a twenty trillion dollar debt that is pretty important.
All our money eventually returns home, unless permanently stored, secreted away or physically destroyed.
Where do you suppose the money used by Americans to purchase products comes from? Americans need to be employed in order to afford consumer goods.
All USD's come from the Federal gov't, the Fed or regulated private banks as loans.
Not all Americans are or want to be blue collar workers. Those are the ones at risk, and IMO will not so simply have to adapt. Or we get more central gov't interventions to support them. I'd rather see new central moneys supporting them, rather than higher prices and/or more taxes for all our people.
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