Yikes, no, here we part ways, respectfully. As I've said, there are winners and losers to decisions (to all of our consumer decisions as well). While one artificial separation in your analysis may be a "loser" in the transaction, and other the beneficiary, this is part of the creative destruction process that frees resources (labor, capital, land) for more efficient uses that raise total utility.
With all due respect, I'm not arguing theory I'm arguing reality. You and I have totally different views of what creative destruction really is, mine follows the more historical lines.
An example of 'creative destruction' is where the automobile replaced the buggy whip and horse drawn carriage industries, or where the computer replaced the electronic typewriter, which replaced the manual, which replaced the pen. That's creative destruction, the newer technologies always come before the old ones are replaced and this process has worked in this manner since man started making tools. They notion that you can destroy first in the hopes that something better will eventually come along is nonsensical. It's like cutting off your feet to replace your shoes, sure you get the new shoes on your feet but what’s the point?
Have you heard of the Maquiladoras Project? Started in 1976 as a way to subsidize Mexico's failed economy with American industries, which received tax subsidies to move there? Worked so well that Bush Sr. expanded the project with the Maquiladoras Industrial Zone and enhanced the subsidies so that even more American industries would make the move.
And don't you think it's a miracle of coincidence when all of those high tech and back office jobs started flooding out of our economy into India just when we were soliciting their help with the War on Terror?
The State Department has been using our economy as subsidy giveaways to curry favor with other countries for 50 years now, don’t you think we’ve given enough?
Ask Ron Paul if it’s true if you don’t believe me.
Following your example (while tone is often lost in these kinds of exchanges, I am explicitly trying to be as respectful to you and your ideas as possible), the social system with the marginal gains adds to NET production gains (assuming, for the sake of your example, that it wasn't a bad economic decision--which of course sometimes happens). Those participants of the "winning" system then gain marginal benefits that become demand for other things. In short, total demand is increased.
Yes, and it's worked out so well for Mexico that 14 to 20 million illegals haven't poured across our southern borders looking for work.
What do you think Mexico will do with all those American production facilities when Ron Paul stops all the subsidies we pour into their country? How about China or India? And what will we use to pay our debts to the world? Money?
I don't mind tone.
Regulatory competition is a good thing. The question is not only one of high tax or regulation, but better tax and regulatory policies. Of course, nongovernmental factors count (increased education or skills in a workforce). It is this dynamic aspect of capitalism that allows former colonies to best former colonial powers.
I just don’t understand all of this resistance to the proposition that our Republic is worth saving both politically and economically, we can’t have a government or a society living off of debt.
Grandfather Economic Report
I posted this in the "Free Trade" and import quotas” thread but I believe it also fits here, edited a little to improve flow:
If "our" government didn’t “borrow” one single penny from other countries, we would still be in debt to those other countries to the tune of 6.6 trillion dollars, our cumulative trade debt with the rest of the world. “Our” government isn’t really “borrowing” money at all, it is attempting to give value to the money that we’ve already spent into those countries by exchanging it for interest bearing notes. The government then takes that money and spends it back into our economy, and they do this because it would look really odd for them to sit around with all the cash they got in return for those interest-bearing notes.
Now, here’s the really good part: Not one single penny of that money including the interest on the notes that they hold can be paid back with money! They’ve already got the money, they don’t want the money, they want the
VALUE for VALUE transaction that that money represents to be completed!
The only way we can ever pay that debt is with our production, barring that, we will pay by exchanging our capital assets and our national infrastructure for that money. And the results of that will be; we will be sitting upon piles of worthless paper without a country!
All of the goods and services we produce today doesn’t mean diddly squat if none of it can be translated into viable products that we can sell into their markets in exchange for the currency we’ve spent into their markets.
And that, my friend, is TRADE in the real world.
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