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HappySqurriel on 09 March 2011
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richardhutnik said:
HappySqurriel said:

The reduction in taxes from the rest of citizens would drive greater spending and investment which would spur growth within the productive economy; and that would lead to job growth and the lack of need for nearly as much welfare.

If the money then flows into funds to invest in China and India, and the money buys goods from such countries, HOW are jobs created in America, and that help those formally on the welfare system?

And here, we have paleoconservatives battle libertarians.  Paleos would say, "We need tarrifs!" and "Throw all illegals out of the country!"  And the Libertarians say, "Free markets!"

I ask all this of people here, because I am curious what people would want me to target so I get off Medicaid and food stamps.  The Medicaid help me get my back fixed, so I will soon be able to get working again.  Not saying I want to be here, but curious WHAT people want me to target.  Who here would end up paying for me to get retrained in something in exchange for getting paid a portion of my income for the rest of my life? 


When a country maintains a trade deficit for a long period of time it experience artificially low interest rates and/or low inflation, while the other country experiences artificially high interest rates and/or high inflation. Unless your government is foolish (and running very large deficits or creating a moronic regulatory system) this gives companies within your country a massive advantage, while putting companies within the other country at a massive disadvantage. The reason for this is that you need to maintain a balance of payments between currencies, or the exchange rates will change to preserve a balance of payments.

 

Didn't you ever wonder where the capital to give people with no jobs hundreds of thousands of dollars to buy houses came from? While the USA maintained a trade deficit with China, excessive capital from China had to flow into American capital markets to maintain a balance of payments ... essentially, this created a sellers-market for debt instruments and an artificial valuation which eliminated any consideration of risk. Because of the lack of (reasonable) controls within the mortgage market, this money flowed into mortgages and the net result was that jobs that were lost in manufacturing were recovered in home construction.