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SamuelRSmith on 29 January 2010
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Kasz216 said:
SamuelRSmith said:
So, along with rapidly priniting money, Obama wants to increase exports as a ridiculously rapid rate? Methinks that the big issue at the next election will be dealing with excess inflation.

Not to mention that the best way to keep exports up (without ridiculous levels of subsidisation - which won't help him balance the Government budget) is to the deflate the currency - which would probably mean keeping interest rates ridiculously low, yet more inflation. That, and the idea of the Government essentially taking out policies to control their rate of exchange would be rather hypocritical - given the pressure on China to free up their currency.

Not to mention he's vowed a "budget freeze" in 2011.  So... I don't think they can use subsidies.  Maybe tariffs... but I mean... that'd be stupid.

I don't know how tariffs can increase exports. I mean, you could argue that lower imports = higher consumption = greater profit from American corps = greater investment = lower long-run costs = lower export prices = greater exports. But that certainly won't happen quick enough for it for double exports in five years (which, according to my brain means 14% growth a year). What's more, he can't increase tariffs in NAFTA, and it will probably cause reactionary tariffs, particularly from the EU and China, which will cut demand from American exports. It will also go against the WTO, which will cause all sorts of issues, including delaying the Doha Agreements even further.

So, yeah, tariffs would be stupid.

 

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He could take some heavy supply-side policies, such as killing trade unions, lowering minimum wages, reducing welfare systems - this would be very good for both increasing exports and helping long run economic activity, but it will kill in the short run (which, as we all know, is all that Obama really seems to care about, atm), and it'll go against the Democrat-grain. So, the best way of actually achieving what he wants, is also the only way that he will never consider.