How to Save the American Economy

[mrstickball]

McDonaldsGuy said:

mrstickball said:

1. Cut federal government spending. Preferably by 35-43% (the amount we're borrowing). Do this primarily by cutting HUD, SNAP, both DoE's, and Defense spending. Reform medicare/SS as much as possible to save costs.

2. Enact either a income-based flat tax, or fair tax. Do away with corporate taxes.

3. Sunset Social Security. Allow the younger generation to invest their earnings in something else other than government debt.

4. Adopt a sane monetary policy - one that doesn't simply print money at every turn.

5. Reform and remove government regulations in every area of life. Promote a "regulation holiday" that would allow businesses to invest and invent new technologies without fear of government destroying their inventions.

6. End the war on drugs. Impose a reasonable tax on pot and other drugs.

7. Repeal (and do not replace) Obamacare. Force insurance companies to compete against each other over state lines, and promote freer-market reforms.

Do those 7 things, and we'd be growing faster than China.

 

By the way, tariffs and protectionism do not work. Don't believe me? Ask the Great Depression. Look up Smoot-Hawley and the effect it played on kickstarting the depression. There's a reason the stock market crashed in 1929 - the same exact day Congress took up debate on (actually) approving such an insane bill.

Globalism doesn't work either - well, if you aren't America it does work I guess. If you're America, it doesn't.

And Smoot Hawley had 0 negative effect on America, just more anti-American pro globalist garbage. Remember, Smoot Hawley was passed after Black Tuesday.  However Smoot Hawley was an awful tariff - no doubt about that. And before Smoot-Hawley, the 1929 Trade Surplus was 0.38% of our GDP.

Our GDP fell 46% from 1929-1934. Exports were $5.9 billion in 1929, and had fell down $3.9 billion to $2 billion in 1933. This $3.9 billion decline was roughly 3.8% of the 1929 GDP, which had already fell down 46%. THus, of the negative 46% GDP decline, only 3.8% of it was due to a fall in exports. If we look at imports, the loss is only $0.2 billion - or .5% of the total GDP decline.

Thus, Smoot Hawley caused only 1% of the 46% of the GDP decline.

Then you have to remember the situation is different here - Americans are losing jobs by the MILLIONS (I believe 6 million manufacturing jobs lost since 2000!). This is because they are going to other countries such as India, Haiti, Burma, China, etc. etc. Then we have a trade dedicit. Keep babbling on about Smoot Hawley while more Americans lose jobs and our deficits grow. We have to stop this. Don't complain about unemployment then be against tariffs.

America will not survive a global economy.

Source:

http://www.bea.gov/national/nipaweb/TablePrint.asp?FirstYear=1929&LastYear=1938&Freq=Year&SelectedTable=5&ViewSeries=NO&Java=no&MaxValue=103.6&MaxChars=5&Request3Place=N&3Place=N&FromView=YES&SmallFont=Y&Legal=&Land=

1. There was a good bit of research done regarding Smoot-Hawley. It did contribute to the loss of GDP during the Great Depression - no less than 10% of all GDP lost during the depression was due to Smoot-Hawley. Why? Because when we add tariffs, so do other countries. Every country we hit with new tariffs hit us back, which was disasterous for many of our industries.

2. Why are we losing jobs? You really don't bother asking, nor answering that question. You simply yell "Tariffs! Tariffs!" in some insane belief that they will fix our problem.

I know people that run manfuacturing in the US. A few, actually, from different disciplines. The problem isn't tariffs. A lot of times, its government regulations. As it stands, tax and environmental regulations add about $15,000 onto every manufacturing job created. That is a huge amount of money, which drives jobs overseas. Reasonable regulations and reforms could drive that cost down, bringing jobs back. Thus the regulatory holiday. Certainly, China is playing an unfair game with currency manipulation, but (again) the response shouldn't be tariffs. It should be a reasonable monetary policy for the US, which would restore the strength of the dollar.