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On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy.
The problem is the consumer pays twice.
Once for the product and once for the subsidy (through taxes). That money could be used more effectively elsewhere.
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On July 28 2011 11:35 BestZergOnEast wrote:
A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings.
That definition makes no sense, any system men live as human beings, don't be so vague.
Denmark has a higher Per Capita GDP than the US. They are doing better than us, according to standard wealth metrics. I say we try some of their methods.
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On July 28 2011 11:50 chickenhawk wrote:Show nested quote +You would never question that it's a good idea to let unprofitable businesses go bankrupt in other industries, so why here? Maybe not in USA, but in Europe although we care, it is not the end of the world if an hospital, school etc is wasting more money than it is earning. Also some Industries are important for the state to support them, like car industry and telecommunications. The problem in agriculture is that oil is getting to expensive, and for small communities to survive they must get some help, why do banks have then and they don't?
Hospitals and schools are usually either publicly run or are nonprofit organizations. They're doing a social good and we feel they should do that even if the people they're doing it for aren't able to pay. So of course we subsidize them.
That doesn't apply to agriculture (or the auto industry... that really doesn't need government subsidies). If there is no cheaper way to produce the things they're producing, the price of those things will be high enough to keep the business profitable without subsidies. If there is a cheaper way to produce them, then we should stop producing them the expensive/inefficient way and instead let the people who can do it more cheaply produce them. We can spend our time and resources on the things we actually have a comparative advantage producing.
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The problem is the consumer pays twice
Yes, but the money stays in country and will be used likewise, not in the other case. It is a trade off, and i think it is a better trade.
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On July 28 2011 11:38 chickenhawk wrote:Show nested quote +- End a lot of business subsidies: Farm subsidies are the most obvious here, but there are plenty of other industries that get them. It's costly, it makes the economy less efficient, and it makes other countries mad at us. Kill three birds with one stone. So kill thousands of job to people with no education, so that US starts to buy food at a more expensive price from outsiders, and at the some time provide social security to those new unemployed? is that your way save the economy?
Agriculture provides a very small amount of employment in the US. (only like 2% total) and it is unlikely that ending subsidies would result in a large decline in farm output. Currently farms are earning very good money thanks to high agricultural prices.
The likely outcome is that most food products would be a bit more expensive but some would be cheaper - especially sugar and corn (esp. corn if you also end ethanol subsidies / mandates).
Most economists believe that agricultural subsidies are wasteful because the value gained from the subsidy does not cover the cost of the subsidy itself.
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As far as i can see, the only short term option will be to keep making the interest repayments and hobbling along untill the us leaders stop crossing their fingers and realise the debt is too big to be paid off in any reasonable period of time.
Then you firesale alaska back to the russians, and probably lots of other stuff to the chinese and middle east, this would reduce the debt to a much more manageable level in the medium term which could then be paid off. only way out i can see short of a miracle or total system collapse
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Just stumbled upon a great article on The Economist's website comparing tax loopholes to the sale of indulgences that fomented the Protestant Reformation. Check it out, it's an easy read and a fun comparison.
Tax Expenditures
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On July 28 2011 06:37 Expurgate wrote:
I don't think any reasonable person could disagree that the government needs to show improvements in service quality :-) However, it seems dangerous to me to insist that revenues not be increased before there is a demonstrable increase in quality. Of course, throwing money at a problem is no guarantee of effective solution; I would argue that it usually results in inefficient and wasteful bureaucracy. But cutting budgets at the levels now being discussed could cause serious harm to the long-term capabilities of departments to perform their delegated tasks.
Although there is a tendency to demonize all federal employees as incompetent buffoons, in my experience many of the lower level rank-and-file are essentially technocrats, who are quite good at doing their jobs. Serious budget cuts could lead to significant loss of expertise among federal employees, leaving us less prepared to make progress when revenues do again start to increase.
Regardless, I think this point is largely moot, since increased revenues raised from eliminating tax loopholes ought to be used directly on paying down the national debt, and not distributed among existing federal programs. Also, while it's certainly a reasonable position to treat the government as though we are "financiers who want to see returns on our investments," one should keep in mind that historically the greatest strength of government vis-a-vis the private sector is its ability to provide employment, stimulus, and infrastructure during periods of prolonged weak returns. The advantage is one of being flexible, even when money is tight elsewhere.
To treat the government as above all financial logic is foolish, to subject it fully to the private sector's constraints equally so!
We've been running deficits for a decade now, and by all accounts most Americans QOLs are worse off than they were in the previous decade. If we don't draw the line now when should we?
I don't believe that cutting budgets could cause serious harm, I think it would provoke all of the smart people in our country to solve a problem that we've been avoiding for quite some time now - how to maintain our expected growth in a globalized economy. My position comes from my strong confidence and faith in my countrymen. Expert veteran employees who are lost will only use their experience to do what they wanted to do, but couldn't do while employed by the government. They won't have a way of making a comparable living otherwise. Nobody loses here; the Government can always contract them to consult, rehire them, or copy their new methodologies at a later time.
I must also bring up that one of the biggest tax loopholes is being exploited by our own government on both sides of the aisle: misuse of the Social Security and Medicare Trust funds. This is why I have to hold the government accountable for their fiscal ineptitudes. They made a promise to the people to return borrowed money, which we were forced to invest in them, with interest and adjusted for inflation. This is not a pie-in-the-sky dream as anyone with a 401k knows. The problem is that they are spending our money to pay down debt, and paying down debt does not create wealth that can be used to pay back our money with interest.
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On July 28 2011 13:59 _Major wrote:Show nested quote +On July 28 2011 06:37 Expurgate wrote:
I don't think any reasonable person could disagree that the government needs to show improvements in service quality :-) However, it seems dangerous to me to insist that revenues not be increased before there is a demonstrable increase in quality. Of course, throwing money at a problem is no guarantee of effective solution; I would argue that it usually results in inefficient and wasteful bureaucracy. But cutting budgets at the levels now being discussed could cause serious harm to the long-term capabilities of departments to perform their delegated tasks.
Although there is a tendency to demonize all federal employees as incompetent buffoons, in my experience many of the lower level rank-and-file are essentially technocrats, who are quite good at doing their jobs. Serious budget cuts could lead to significant loss of expertise among federal employees, leaving us less prepared to make progress when revenues do again start to increase.
Regardless, I think this point is largely moot, since increased revenues raised from eliminating tax loopholes ought to be used directly on paying down the national debt, and not distributed among existing federal programs. Also, while it's certainly a reasonable position to treat the government as though we are "financiers who want to see returns on our investments," one should keep in mind that historically the greatest strength of government vis-a-vis the private sector is its ability to provide employment, stimulus, and infrastructure during periods of prolonged weak returns. The advantage is one of being flexible, even when money is tight elsewhere.
To treat the government as above all financial logic is foolish, to subject it fully to the private sector's constraints equally so! We've been running deficits for a decade now, and by all accounts most Americans QOLs are worse off than they were in the previous decade. If we don't draw the line now when should we? I don't believe that cutting budgets could cause serious harm, I think it would provoke all of the smart people in our country to solve a problem that we've been avoiding for quite some time now - how to maintain our expected growth in a globalized economy. My position comes from my strong confidence and faith in my countrymen. Expert veteran employees who are lost will only use their experience to do what they wanted to do, but couldn't do while employed by the government. They won't have a way of making a comparable living otherwise. Nobody loses here; the Government can always contract them to consult, rehire them, or copy their new methodologies at a later time. I must also bring up that one of the biggest tax loopholes is being exploited by our own government on both sides of the aisle: misuse of the Social Security Trust fund. This is why I have to hold the government accountable for their fiscal ineptitudes. They made a promise to the people to return borrowed money, which we were forced to invest in them, with interest and in such a way that it would provide us a reliable income in our old age that was relative to our working income. This is not a pie-in-the-sky dream as anyone with a 401k knows. The problem is that they are spending our money to pay down debt, and paying down debt does not create wealth that can be used to pay back our money with interest.
I'm sorry, I must've misunderstood your "financiers" comment, I totally agree with your comments about tax loopholes and the Social Security Trust.
Conjecture is about all we can do regarding the effects of laying off government employees. If done properly, I imagine it will have a moderate long-term effect. The problem is that, like most things the government does, it will probably do a just ok job, and let go of specialists who ought to be retained. It's a tricky situation, and I appreciate the need to reduce personnel and cut expenditures. I just wish there were a way to make sure the technocrats are kept around.
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On July 28 2011 14:08 Expurgate wrote:Show nested quote +On July 28 2011 13:59 _Major wrote:On July 28 2011 06:37 Expurgate wrote:
I don't think any reasonable person could disagree that the government needs to show improvements in service quality :-) However, it seems dangerous to me to insist that revenues not be increased before there is a demonstrable increase in quality. Of course, throwing money at a problem is no guarantee of effective solution; I would argue that it usually results in inefficient and wasteful bureaucracy. But cutting budgets at the levels now being discussed could cause serious harm to the long-term capabilities of departments to perform their delegated tasks.
Although there is a tendency to demonize all federal employees as incompetent buffoons, in my experience many of the lower level rank-and-file are essentially technocrats, who are quite good at doing their jobs. Serious budget cuts could lead to significant loss of expertise among federal employees, leaving us less prepared to make progress when revenues do again start to increase.
Regardless, I think this point is largely moot, since increased revenues raised from eliminating tax loopholes ought to be used directly on paying down the national debt, and not distributed among existing federal programs. Also, while it's certainly a reasonable position to treat the government as though we are "financiers who want to see returns on our investments," one should keep in mind that historically the greatest strength of government vis-a-vis the private sector is its ability to provide employment, stimulus, and infrastructure during periods of prolonged weak returns. The advantage is one of being flexible, even when money is tight elsewhere.
To treat the government as above all financial logic is foolish, to subject it fully to the private sector's constraints equally so! We've been running deficits for a decade now, and by all accounts most Americans QOLs are worse off than they were in the previous decade. If we don't draw the line now when should we? I don't believe that cutting budgets could cause serious harm, I think it would provoke all of the smart people in our country to solve a problem that we've been avoiding for quite some time now - how to maintain our expected growth in a globalized economy. My position comes from my strong confidence and faith in my countrymen. Expert veteran employees who are lost will only use their experience to do what they wanted to do, but couldn't do while employed by the government. They won't have a way of making a comparable living otherwise. Nobody loses here; the Government can always contract them to consult, rehire them, or copy their new methodologies at a later time. I must also bring up that one of the biggest tax loopholes is being exploited by our own government on both sides of the aisle: misuse of the Social Security Trust fund. This is why I have to hold the government accountable for their fiscal ineptitudes. They made a promise to the people to return borrowed money, which we were forced to invest in them, with interest and in such a way that it would provide us a reliable income in our old age that was relative to our working income. This is not a pie-in-the-sky dream as anyone with a 401k knows. The problem is that they are spending our money to pay down debt, and paying down debt does not create wealth that can be used to pay back our money with interest. I'm sorry, I must've misunderstood your "financiers" comment, I totally agree with your comments about tax loopholes and the Social Security Trust. Conjecture is about all we can do regarding the effects of laying off government employees. If done properly, I imagine it will have a moderate long-term effect. The problem is that, like most things the government does, it will probably do a just ok job, and let go of specialists who ought to be retained. It's a tricky situation, and I appreciate the need to reduce personnel and cut expenditures. I just wish there were a way to make sure the technocrats are kept around.
I think the key is to focus on 1 or 2 sectors that are the highest priority and fix them, allow the other ones the opportunity to pull themselves up by their bootstraps. Obviously some of them will go from bad to worse. But if we're hiring competent people and providing them with the tools to do the job then just as many, if not more, should go from good to better. The government will never be able to keep these Technocrats at the rate they are going anyway. It's not just about making sure they have a paycheck. The real fear of any employer, even the government, should be that their key employees will leave because they can find everything and more someplace else. As it stands right now, the government can't compete with the private sector. As special interest gets more and more powerful it stands no chance of convincing anyone that they can serve their countrymen better by staying with the government. Just look at the PMCs if you don't believe me.
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On July 28 2011 11:21 jon arbuckle wrote:Show nested quote +On July 28 2011 11:13 Probulous wrote:
Once again, how in all nations did we get here? For lack of a better term, naive libertarianism. Sort of not understanding politics (or for that matter history, economics, logic, etc.) because it doesn't need to be understood because whatever it is it should be demolished and replaced with some system of Rand/Mises-inspired pseudo-feudalist oligarchy that is represented as some vague vision of freedom, prosperity, "good economy," etc. Some people are arguing against this ideology and its mouthpieces and are either ridiculously patient and disciplined or catatonic and slack-jawed. That's how.
Just thought I'd follow up a little on this, for anyone who was in doubt.
I was the guy who, a few pages back, went after the (ostensible) philosophical foundations of this craziness, and found it more-than-a-little lacking. It may be puzzling that I'd bother to do any more work on the issue due to its obvious insanity, but consider it a reflex; when what I do for a living is imitated in order to justify irrational notions, it's hard not to be annoyed.
I can't find a full, convenient list, with CVs, of all the people who contribute papers to this mises.org nonsense. The best I can do is the faculty page for their 'Academy' (http://academy.mises.org/faculty/), which seems to be their scholarly 'heavy hitters' that teach courses for a fee. I'm sure it will come as no surprise that not a single one of them is even a little qualified to talk about epistemology or logic, nor indeed philosophy of mind.
I obviously can't confirm that everything they say on the issue is bonkers, because I'm not going to put myself through reading everything written on that bloody website, but I can say with a pretty high degree of confidence that any 'philosophy' or 'logic' (and their related jargons) that these people appeal is at best pseudo-philosophy, and not in any way representative of what any intelligent practitioner does.
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As always, Paul Krugman is a interesting read in all of this. The nobel prize winner said for a long time that the US is about to turn into a latin american country, with a dying middle class.
"At the time of writing, President Obama’s hoped-for “Grand Bargain” with Republicans is apparently dead. And I say good riddance. I’m no more eager than other rational people (a category that fails to include many Congressional Republicans) to see what happens if the debt limit isn’t raised. But what the president was offering to the G.O.P., especially on Medicare, was a very bad deal for America.
[...]
For Medicare, with all its flaws, works better than private insurance. It has less bureaucracy and, hence, lower administrative costs than private insurers. It has been more successful in controlling costs. While Medicare expenses per beneficiary have soared over the past 40 years, they’ve risen significantly less than private insurance premiums. And since Medicare-type systems in other advanced countries have much lower costs than the uniquely privatized U.S. system, there’s good reason to believe that Medicare reform can do a lot to control costs in the future.
[...]
It’s true that Medicare expenses could be reduced by requiring high-income Americans to pay higher premiums, higher co-payments, etc. But why not simply raise taxes on high incomes instead? This would have the great virtue of not adding another layer of bureaucracy by requiring that Medicare establish financial status before paying medical bills.
But, you may say, raising taxes would reduce incentives to work and create wealth. Well, so would means-testing: As conservative economists love to point out in other contexts — for example, when criticizing programs like food stamps — benefits that fall as your income rises in effect raise your marginal tax rate. It doesn’t matter whether the government raises your taxes by $1,000 when your income rises or cuts your benefits by the same amount; either way, it reduces the fraction of your additional earnings that you get to keep.
So what’s the difference between means-testing Medicare and raising taxes? Well, the truly rich would prefer means-testing, since they would end up sacrificing no more than the merely well-off. But everyone else should prefer a tax-based solution..."
[...]
http://www.nytimes.com/2011/07/25/opinion/25krugman.html?partner=rssnyt&emc=rss
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On July 28 2011 11:24 chickenhawk wrote:Show nested quote +Do you even understand your own argument? If Denmark and Sweden are not socialist then what do mass graves have to do with Social Security and government provided health care? He just does not understand that half of Europe has parties in power with the words socialist in them.
That is true, but I wouldn't call them socialist or social democratic in what policies they enact (despite their name and the big speeches they hold). Most of them are just as corrupt and bought by big business as conservatives or right-wingers. What is nowadays "the middle" was 20 or 30 years ago right-wing, there was a shift in European politics to the right, and this goes for all major parties. For American conditions, most of them are still left-wing radical, but that's not the standart I want to measure a political party.
I know off-topic but just wanted to say and clarify something.
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On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy.
If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices.
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On July 28 2011 18:33 OsoVega wrote:Show nested quote +On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy. If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices.
prices would rise (I am not quite sure if it would be to such an extreme degree, in my opinion they would rise to an adequate level), but more jobs would exist and the massive trade deficit would get reduced.
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On July 28 2011 18:51 BlackFlag wrote:Show nested quote +On July 28 2011 18:33 OsoVega wrote:On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy. If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices. prices would rise (I am not quite sure if it would be to such an extreme degree, in my opinion they would rise to an adequate level), but more jobs would exist and the massive trade deficit would get reduced.
Read this blog post. US manufacturing is doing just fine, despite popular opinion otherwise. It's just that in the US we use high-tech mechanized manufacturing techniques, so it doesn't require a lot of employees. Pushing for more manufacturing jobs is really just the same as any other Luddite-style complaint against efficient new technology. We need new jobs, but there's no reason they have to be in the same industry they were in in the past.
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On July 28 2011 19:12 aristarchus wrote:Show nested quote +On July 28 2011 18:51 BlackFlag wrote:On July 28 2011 18:33 OsoVega wrote:On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy. If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices. prices would rise (I am not quite sure if it would be to such an extreme degree, in my opinion they would rise to an adequate level), but more jobs would exist and the massive trade deficit would get reduced. Read this blog post. US manufacturing is doing just fine, despite popular opinion otherwise. It's just that in the US we use high-tech mechanized manufacturing techniques, so it doesn't require a lot of employees. Pushing for more manufacturing jobs is really just the same as any other Luddite-style complaint against efficient new technology. We need new jobs, but there's no reason they have to be in the same industry they were in in the past.
I am not saying that "we" should take the role of china, but don't you think that the huge trade deficit is a growing problem for the USA?
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On July 28 2011 18:51 BlackFlag wrote:Show nested quote +On July 28 2011 18:33 OsoVega wrote:On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy. If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices. prices would rise (I am not quite sure if it would be to such an extreme degree, in my opinion they would rise to an adequate level), but more jobs would exist and the massive trade deficit would get reduced.
Adequate? What is adequate? Have you looked at the difference between US minimum wage and what factory workers are paid in China? The only way to get businesses to manufacture their products in the US would be to force them or to offer them massive incentives. If they were forced, they would basically be giving charity to their workers and the price increase needed to pay for this charity would be seen at the cash register and Americans would suffer and certainly buy less. If the government were to give companies massive incentives, we would basically be paying most of the workers salaries through tax and then buying the product for the same price, or some variation of that with the less we pay of the workers salaries in tax the more we pay for the product.
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On July 28 2011 19:18 BlackFlag wrote:Show nested quote +On July 28 2011 19:12 aristarchus wrote:On July 28 2011 18:51 BlackFlag wrote:On July 28 2011 18:33 OsoVega wrote:On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy. If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices. prices would rise (I am not quite sure if it would be to such an extreme degree, in my opinion they would rise to an adequate level), but more jobs would exist and the massive trade deficit would get reduced. Read this blog post. US manufacturing is doing just fine, despite popular opinion otherwise. It's just that in the US we use high-tech mechanized manufacturing techniques, so it doesn't require a lot of employees. Pushing for more manufacturing jobs is really just the same as any other Luddite-style complaint against efficient new technology. We need new jobs, but there's no reason they have to be in the same industry they were in in the past. I am not saying that "we" should take the role of china, but don't you think that the huge trade deficit is a growing problem for the USA?
It's a problem, though it's separate from the deficit problem. (Obviously not completely unrelated, but not particularly closely linked.) And it's partly a consequence of, for example, Chinese currency manipulation. You don't solve it by subsidizing businesses you wish would export. And there's no reason that exports would have to be manufactured goods. We export lumber, software, movies, etc. Fix it with macro policies aimed at the trade balance in general, not by trying to pick favorite industries.
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On July 28 2011 18:33 OsoVega wrote:Show nested quote +On July 28 2011 11:51 vpatrickd wrote:
Subsidies are doing the economy good. It is one of the things that can reverse a trade deficit, because through subsidies, domestic products will be priced cheaper than imported = people would buy more domestic = less demand for imported = less trade deficit, more trade surplus.
So ending business subsidies is not a good idea.
The only way the US government can end their debt is by printing more money = more US dollars. This would depreciate the dollar to record low compared to other currencies, but right now they have no other way.
What they can do in the future though, is introduce incentives for local businesses to manufacture consumer goods domestically, stop outsourcing, but keep opening their doors to foreign trades because foreign investments = more money into the economy. If businesses started to manufacture goods domestically without a removal of minimum wage all it would result in is extremely inflated prices.
Which is better than $14 trillion of debt.
This debt was caused by accumulation of trade deficits over the past 2 decades.
If the US can limit (quota/embargo) on their imports, it will do wonders to the domestic economy.
Well SADLY, the government did nothing because we ALL WANT CHEAPER goods and no one cared about the bad effects it would cause their economy.
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EPT
