Originally Posted by
Melonie
trying to keep economics as a significant part of politico-economics discussions, in the final analysis America can't 'have her cake and eat it too' ! 'Free Markets' allow Americans to buy things at the lowest possible price, but at the same time make US made products uncompetitive (for a variety of reasons including minimum / union wages, high corporate taxes and high employers' SSI/medicare taxes, high mandated benefit costs i.e. unemployment and workmen's comp, high environmental compliance costs etc. etc. etc.). Erecting trade barriers to maintain American competitiveness artificially also results in higher than necessary prices (classic example is US ethanol, which is artificially priced at 54 cents/gallon over world prices thanks to US tariffs and import quotas, adding 5.4 cents to the cost of every gallon of blended gasoline sold in the USA - for which the stockholders of PEIX, VSE etc. and the US corn farmers don't even say 'thank you').
There is already some serious discussion about enacting a 27% tariff on all goods imported from China into the USA. While this would undoubtedly stop a few American jobs from being exported, it would also cause a 27% across the board price increase for 1/2 the merchandise sold by WalMart, Target etc. What follows that, a request for a 27% increase in social welfare benefits as well as a 27% minimum wage increase in order to maintain the same 'minimum US standard of living' in the face of increased prices ? IMHO this will only kick off a new inflationary spiral with everything eventually winding up right back where it started except 27% more expensive. In this scenario, the only true beneficiary will be the US gov't who is collecting the tariff revenue as well as collecting more income tax from US wages which have been inflated by 27% !