To Tom: The problem with being entirely service-oriented is this: Without actually manufacturing and exporting products, we develop a huge trade deficit and our economy becomes a hollow shell that
other countries consider entirely expendable. Sure, they'll sell to us for as long as the dollar is worth something, but other than that, we're of no real use to them, so they can "cut us off" at any time - and since we're so dependent upon everyone else for tangible goods, that would destroy us. We need to regrow our manufacturing base so we can be at least somewhat self-sufficient (and carry our weight in the world economy).
To riner69er: Hopefully the above paragraph helps to shed some light on "Who are we going to trade with?" Answer: NOBODY, until we have something to offer that will give others an incentive to drop out of those "free trade" (managed trade) agreements as well. Once we have something tangible to offer, other countries will follow our lead - ESPECIALLY developing nations, which today are totally coerced into agreeing with the WTO's biased policies and trade management if they want to have any trade with any industrialized nations at all. In essence, industrialized nations are engaging in cartel behavior with each other through these agreements (on behalf of multinational corporations), and since we hold such immense power and no real competitors have arisen outside of these agreements, developing nations are forced to accept the WTO's terms or suffer through economic isolation. Real, unilateral, unmanaged free trade would be highly beneficial to these countries, because then they'd be able to decide for themselves who they want to trade with and in what ways (instead of forcing themselves to open themselves up completely if they want to import or export anything at all)...and if the leaders of a developing country decide they don't want "Globocorp" setting up shop there and draining the country's collective resources, they'd be able to make that call - without sacrificing their ability to make necessary imports and exports (a decision which would incidentally help our own manufacturing base). Besides, managed trade agreements HAVE to go: "Free trade" isn't really free if we're
forcing everyone else by the barrel of a gun to be "totally free" if they want to have any trade at all.
Anyway...so, how do we regrow our manufacturing base? Simple: Get the blasted government out of the way:
- Get rid of federal regulations and corporate welfare: Right now our economy is utterly dominated by multinational corporations, and way too many government regulations exist that help them at the expense of everyone else (since they're the "incumbents") and hamper competition. Also, the government constantly helps out these same companies directly with subsidies and special contracts. Essentially, it's currently profitable for large corporations to spend tons of money lobbying for regulations that will lock out competition (which, needless to say, it quite wasteful). Reasserting the legitimacy of the Constitution (and the illegitimacy of all of the regulations and subsidies) would even the playing field. It would also increase the overall size, efficiency, and benevolence of the economy: When companies have to sink or swim in dealing with real competition, that means they have more competition for both customers AND employees, so they have to be quite friendly to both consumers and workers. When we open doors to real free market competition, we allow the economy to grow more (and better) jobs and overall wealth.
- Drastically reduce the tax burden Every dollar that goes to the government is mostly wasted potential - sure, it will often circulate back into the domestic free market eventually, but it will still continually be recycled into the government through further taxation. Since government programs are so damn wasteful and inefficient (since the federal government isn't really accountable to anyone for performance, federal bureaucracies are the closest thing on earth to eternal life, and we the people hardly have a voice in these matters), moving all of this money back into the free market will greatly increase the amount of money that people and companies will have to save, invest, or buy things with. Since private investment will rise, it follows that entrepreneurialism, competition, and innovation will also increase.
- Drastically reduce the tax burden, part 2: Also, it's important to note that our own manufacturing jobs are often being outsourced to developing countries. Since there's very little competition in those countries, the multinational corporations that go over there have supply and demand wayyyyy in their favor and they can therefore exploit the workers (since millions of people want the job). This situation hurts everyone except for "Globocorp" shareholders - it hurts our manufacturing base and it hurts the long-term economies of those other countries (because with all of the third world citizens scrambling for nickel-an-hour jobs making money for a multinational, their country's resources are being misplaced, when they could be going towards growing their own economy). One of the major reasons corporations outsource labor overseas in the first place is because our tax burdens are so high that it's more profitable to move offshore. HOWEVER, outsourcing labor comes at a huge price, especially when you're trying to sell your goods back to the American people: Shipping costs, moving costs, etc. If our tax burdens were much lower, it would be more profitable for them to hire workers in the US (since the costs of outsourcing would begin to eclipse the benefits of paying sweatshop wages).
- Get rid of the inflation tax: This one's obvious - every time money is printed, it's a transfer of wealth from the poor and middle class to the government and whoever the government hands the money over to, and most of the time, those recipients are wealthy (Debt payments to international bankers? Exclusive no-bid contracts with Halliburton? Corporate welfare?). Besides destroying the savings of ordinary Americans, it also feeds corporate welfare and thereby works to gimp competition.
This was a bit of a rambling post, but the point is...as long as we get rid of all of the government that's in the way of our own economy, we can grow into an economic powerhouse again - and then, other countries will want to trade with us enough that it'll be worth pulling out of their stupid little agreements.
P.S. While we probably need to keep some relatively large tax resources around long enough to bail us out of the Social Security mess, it really wouldn't take much revenue to fund a truly Constitutional government...if you really think about it, we'd mostly just be paying for our military, the courts, and the salaries of a few politicians.
Nearly everything else would be left to the states and the free market. Small uniform tariffs (low enough as to not piss anyone off
) and excise taxes would probably be sufficient for such a limited governmental role...
