For me it seems to make the discussion of the international trade deficit a bit complicated to discuss other variables (like debt and the printing of money). To be clear, I don't at all believe in printing money like we have been and debasing our currency: it's destroying the dollar. But we wouldn't be in this kind of debt if we still had good jobs here.
It's just the reverse. We don't have the good jobs because of debt and distortions of the credit markets.
I'm not sure how your statement relates to international trade, but if this week I pay $100 for my groceries, then all of a sudden the FED creates zillions of dollars out of thin air, then each dollar is worth less so the next week I would pay, say, $115 for the same groceries. So I would have to produce more in order to pay for my groceries the second week.
If the Fed creates zillions of dollars, who spends it? The government? The banks? How do they spend it? That's right, they hire people. People that are no longer working in manufacturing.
Imagine that we all worked in manufacturing, with no trade deficit. We import as much as we export. $100 buys an average worker's day's labor, and $300 buys a day of labor from a plant manager. Now imagine the government prints up a ton of money. It suddenly is able to offer contractors and employees $120 a day to process paperwork, manufacture war supplies, build mars rovers, etc. Imagine the banks, through the federal reserve, also get a great deal of this money. They are now able to offer the best and brightest $400 a day to sit in an office and dream up investment schemes.
Do you think manufacturing would drop off?
Now imagine that average people start borrowing more and more. Suddenly, Matilda, down the street, who had lived in a small apartment, gets a loan to buy a house. Imagine there are millions of Matildas. Suddenly, workers can be hired at $150 a day to build homes. More quit their jobs at plants. And more plants, unable to offer the higher wages and still be able to compete, close.
Imagine millions of Matildas begin to finance a great deal of consumption on their credit cards. Now, there are more high paying jobs at department stores, hair salons, and golf courses.
Suddenly, we have a service based economy. It seems prosperous, because of all the money that keeps pouring in from individual borrowers, from municipal and state borrowers, from the Federal Reserve's printing of money, and from Federal borrowing. What happens when people stop borrowing, or government stops printing? A crash. The bottom falls out of the false economy, and we all have to get real jobs.
The new money is coming from borrowers, governments, and banks, not from real, sustainable sources -- other producers, both here and overseas. That's the problem.
i don't like any of this stuff, particularly their pegging their currency to the dollar because that means we are forever slaves to being in debt to them-- we cannot compete against them if they don't allow their currency to float. it would be better to be free, feel our pain, and slowly try to rebuild our manufacturing base. Because of this entangling alliance we are suffocating. so disallow the peg.
I agree, I'd rather they pull the plug, so we can get the pain over with, and get back to a real economy.
at the same time I like Ron Paul's idea of starting with a new, competing, currency in different states (and if it works in those states to slowly start using it throughout the country to replace the dollar). It will be painful, but we have to do it and the sooner we untangle ourselves from China, the better.
I think alternative currencies are key, especially metals. If, to any extent, we can develop a real economy based on production, and trade in a stable currency like silver, we'll be able to avoid the worst of an eventual collapse.
what a mess. I know my dad was telling me an industry close to where he lives just put in scrubbers in their smokestacks. It was an investment and it costed them, but he said the results are supposedly remarkable. Rather than people from all over the area where he lives be sick in the future from air pollution, it makes it a whole lot easier for that manufacturer to simply have put in scrubbers.
Good for them! I would say that if they pollute the area, they should have to compensate the people who live there. That would motivate them even more to use pollution control measures.
i don't know what the answer is except that the government causing all the piles of horror stories is just simply bad government. I don't think that necessarily means we should get rid of the government and let it all go to private lawsuits and people getting sick.
People get sick now! And if the companies get good lawyers, they can go on polluting. Don't you agree that if your land, water, or air gets polluted, you should be compensated? This is the best way to hold companies accountable.
I'm just saying, replace regulation with compensation for victims. This means that the money will go where it should -- to the victims -- and that instead of companies working to fulfill some bureaucrat's wishes, they'll be working to ensure they don't harm others. They'll also be able to figure out new and innovative ways to reduce pollution, rather than just checking the box on some form.
Isn't that what we want?
Instead I think we should make sure the government has clear, focused, but limited powers. And I think we should replace bad government with good government when it comes to conservation.
And I want nonstop rainbows and gumdrops. When power is placed in the hands of a few, they'll abuse it. It's always been the case -- the bureaucrats are just as self interested as the industrialists. They want money and power.
i don't want to see my country become a cesspool like China just to be able to compete with it.
Where did I support no accountability for polluters?
Actual liability for harm is the last thing polluters want. They can easily hire teams of lawyers, skirt the law, and grease the hands of key government officials. Reversing the decision the government made during the industrial revolution, to refuse to allow victims of pollution to seek compensation, would be far more effective.
