Free trade hasn't gone anywhere, we don't have free trade. Or free markets. If we did bad banks would have been allowed, or forced, to declare bankruptcy or be bought out. AIG would be gone. The same with Detroit auto makers. Then better run companies would have risen to the top.
It's nice to blather on thinking you know something but in fact you do not.
Yes it is. And that exactly what you're doing.
Witness the epic economic collapse of the banking industry in 2008. Free market forces at work that ripped $2 TRILLION dollars from our treasury and countless BILLIONS of dollars of people's savings, property values, jobs...the economic tsunami was unprecedented.
Not one of those bailouts happened in a free market. In a free market those banks, insurance companies, and Detroit would have been allowed to fail. Then businesses that were run better would have come to the top. In a free market multi-millionaires would not have received millions more in federal handouts.
Income stocks *were* a good place for your retirement money. They may be again- but for the near to mid term future, you risk losing 20 to 30% of your retirement money owning in come stocks. You risk losing just as much in bonds because once interest rates start rising they are going to lose a lot of value. And you can't get better than about 2% in CD's.
I cited 2 income stocks, both with better returns than those 2% CDs, the lower return being almost 4%. For more examples do what I did, Google income stocks. Right now the first result is the definition of "income stock" given by investopedia and the second Stocks For Income Investors In 2010. I didn't check it out but the third result is the Fool's5 Stocks for Strong Income. Now while those links may be from people who have their own agendas, such as trying to have stocks they own rise in price before they're dumped so does Warren Buffet. I say that even though what I know about him I like. The same with George Soros. Now do you think they have the same outlook on investments? Here's the portfolio at Soros Fund Management LLC.
I'm using a mixture of approaches... dividends as you suggest (I'm 17 years from retirement), some dollar cost averaging, a big pile of cash, and a big pile in overseas investements as a hedge. And I'm getting debt free-- no house debt, no car debt. I'm already free of debt other than those and both of those are now quite low (I might be out in 24 months).
While the rest sounds okay, why the "big pile of cash"? As you said yourself inflation could gobble it up. One year's living expenses should be enough. But not just cash. Have 3 months in saving for ready cash, then have the rest in 6 month CDs that mature every 3 months. Of if a money market account offers higher interest then use that instead of CDs. If and when it comes down to it cutting out non-essentials, taking out odd or temporary jobs, and growing some of your own food should stretch that year of emergency funds out further.
And yes, gardening. Just this week even though it's still early I picked some greens in my garden for salad, leaf lettuce and mustard. Now I did buy some carrot, onion, and radish because it's too early for those and I tossed some sliced ham and turkey and well as grated cheese I bought too. However within a few more weeks I should have enough in my garden for more salad and other dishes. I have Roma tomato plants to make tomato sauces, yellow tomatoes for salad, and more for soups and salsa. For salsa, and soup, I also have tomatillos. Though it won't be much I hoping I can at least can a few quarts of them.
Oh, lest I miss it, you say you have no house debt, did you pay off a mortgage early or on tyme? If early, was the interest high? If so then it may of been better to refinance to a lower rate. With the one year emergency fund even if you lose your job and become unemployed you could still make your payments. Of course, you may feel better being debt free and having less risks. If so and that's important to you then go for it. Personally I wouldn't, but then again I can handle higher risks. So long as I have that year of funding I can get by.
Get by? HAHA Because I'm on disability and it is being messed with, so far this year I've only got money 4 out of 6 months and not once was it the full amount of my disability, I'm living week to week. I am glad
How much is a thousand dollars invested in 2000 worth now?
It's a little over negative 30%.
And how much will it be worth in 2020?
As I said in the post you replied to, if you are going to need money soon, it should be invested in income stock not growth stocks.
AEP, American Electric Power Company, Inc, closed at $32.39 today. Dividends paid out: $.41 for the quarter ending 31 March, with the same payouts the previous 4 quarters. For the year ending 31 March 2010 dividends paid were $1.24. At today's closing price that's a return of 3.83%, better than some interest bearing accounts.
AEE, Ameren Corporation, closed at $23.68. Dividends paid on 31 March 2010 was $.39 again with the same amount paid out over the previous 4 quarters. One year's payout was $1.56 with a return of 6.59%.
The current market behavior is likely to go on for another nine years in a secular bear market before we get another secular bull market.
Citation needed.
It's generally a bad idea to have your retirement income in stocks.
Excuse me but I did say that if you're close to retirement you have to adjust your investment portfolio. As as the above data shows, income stocks are a good place for investments for retirement.
We can't sustain our income advantage over the rest of the world. The difference is too large.
I never said I wanted to keep an income advantage over the rest of the world. I've actually pointed out in freer markets incomes will converge. Nor do I want any such advantage, in my original post that you replied to I said "I'd like to see an economy where the hardest financial decision those willing and able to work has is whether to spend a month in Spain or China on vacation. Or to get a Tesla Roadster, or whatever it's competition will be. Or maybe pinch pennies to save and invest everything they can so they can retire when they reach 50." I don't care if I don't have as much money as the next person, what I do care about is having enough money to live on and if I have children to give them the best chance for them to have a good life.
Why should a poor person pay a greater percentage of his income as tax then a rich man?
On the contrary, the poor should be consuming less not more than the wealthy. The poor should be investing their money to improve their economics, by say going to school and getting trained then by investing some of the new money they're making. Ask yourself, how did the wealthy who did not have their wealth handed to them on a silver platter earn it? They earned it by working for it. By struggling to get an education or pinching pennies to invest.
Better tax system:
Everyone gets $X government check, this replaces all other government handouts. Everyone gets it.
Oh, come on. You can't really be seriously suggesting this. Government handing a couch potato the same amount of money as someone who breaks their backs in construction or the one who spends 4, 6, or 8 years in college to get a degree before getting a job. If a person can sit there watching TV all day why would they work? And why should I, you, or anyone else, support them?
how do you decide how much of the military you are using? Or how do you decide how much of a safety net you need? Both of these things are things that a society (so a collective of people) need to work at together, and the government is exactly the body that we have erected to do things like this for us.
First, many of the things the US government does it has not constitutional authority to do. Second, I did not decide any spending, I oppose most of it. And no, the US government was not erected to do most of the things it does, otherwise the Founding Fathers would have included in things the government can do.
Maybe you're one of those expansionist who believe the constitution can be made to mean whatever you want it to instead of what it actually means. As Thomas Jefferson said: "To take a single step beyond the boundaries thus specifically drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition."
Short of radically cutting back on social services (and thus bringing back the worst of our capitalistic days where Civil War widows were living on the streets in great numbers), this is just not going to happen.
Oh, I absolutely have to ask for citations about this, otherwise it's FUD.
23% sales tax is enough to kill pretty much any economic activity.
Yet you'd have people pay even more in taxes. The tax on the top income in the US is 35% of their salaries, bonuses and business income. And those numbers are from the pseudo (fake) liberal New York Times.
Why shouldn't taxes punish people for negative externalities? For example, gas taxes are a more free-market way of limiting smog from cars than mandating that every new car have a certain fuel economy or telling the manufacturers every car needs to be a hybrid.
I agree with you about discouraging people for negative externalities but fuel taxes are a poor example. Fuel taxes don't pay enough to maintain roads as it is.
Furthermore, pretty much all of the taxes you pay do go to stuff the government pays for that you have previously benefited from (public education), are benefiting from (the military, police, fire protection, roads), or will benefit from (Social Security, Medicare, federally funded research).
Now here I disagree. First the federal government has no constitutional authority to provide or regulate education. Leave education to local and state governments, which can and should use property taxes to fund. State and local governments should also pay for most roads with property and fuel taxes. Property tax pays for the building of the roads then the fuel tax pays for maintenance. Property tax should also pay for firefighters and police. Going back to the feds, the military should be significantly reduced in size. We don't need military bases all over the world. Close the bases in Japan for instance and require South Korea to reimburse US military costs there. Then with Social Security, it should be privatized, that was one item on a very short list of what Bush wanted to do that I supported. Medicare? It sucks, yet congress and Obama want to make everyone's health care just as bad. And yes, I know it sucks as I am on it myself. If government really wanted to help people with health care and insurance it would have mandated a freer market in insurance and gave those unable to afford it credit to buy insurance in the market. The feds shouldn't be funding research either, but since it does the research should be open sourced so anyone could use it. A flat tax, or better a sales tax, and user fees could fund the rest of what the feds do that are constitutionally authorized. Like the greatly reduced in size military. And the fuel tax paying for roads.
All you need is one good bout of inflation and you can kiss your retirement goodbye.
Combined with low rates on savings, there is not a lot you can do to avoid that freight train on the way (it also wipes out pensions and social security too).
Inflation will only wipe out savings if the investment decisions made are poor and a number of other things happen at the same tyme or in close sequence. Though down from it's peak the Dow Jones Industrial Average is still way higher today than it was in 1973. A thousand dollars invested in 1973 is worth $10,000 today, at it's peak the investments would have been worth $14,000. And in 5 years it may be back up there. Now if you're going to be retiring in 5 years it's a good idea to have a big part of your investment portfolio in income stocks, companies that regularly pay out dividends. Utilities are pretty good. If however you still have 30 years before retirement simple regular investments in growth stocks using dollar cost averaging will keep you in good company.
Obviously today people don't save and invest much and instead expect government, ie other workers, to pay for their retirement.
They are capable. They have issues. They are half a world away. But it's idiotic chauvinism to assume they won't be equivalent within five or six years.
I agree but they'll also be demanding higher pay. By then US companies may decide it's cheaper or financially better to employ US workers. Tesla is opening a plant in CA, as I bet other businesses will do too. Hell, Detroit automakers have to compeat with Japanese makers that have and are opening plants in the US. States compeat with each other to lure them to the state.
The correct way of looking at this is that there will be a shift from offshore to onshore production
The correct way is to realize other nations will retaliate. Many of the one in five US employees will see their employers harmed by other nations raising their tariffs.
And to raise import tariffs will cause many more jobs to be lost. Caterpiller, General Electric, and other businesses employ thousands of workers, about one in five. And they depend on exports. "Caterpillar sells China some of its most sophisticated, and therefore expensive, American-made equipment, including giant bulldozers, large mining trucks and gas turbines." GE has been providing the turbines for China's Three Gorges Dam. They, and their employees, can say goodbye to their exports.
Haven't you heard of the Smoot-Hawley Tariff Act? When the US passed it in 1930 other nations passed their own protectionist laws. That made the Great Depression worse than it would have been.
And yes, I do support getting rid of a lot of the free trade stuff (NAFTA, etc.) and imposing more tariffs.
And no, NAFTA is not and never was free trade. If you want to complain about NAFTA complain about how because of the billions of dollars agricultural businesses receive in farm subsidies they are allowed to dump corn in Mexico cheaper than Mexican farmers can grow corn.
Consumers are already paying for the degenerate practice of shipping jobs overseas.
Yea, they get to buy cheaper goods. And the one in five employees who work for an exporter like Caterpillar and GE get to keep their jobs.
Putting a tax of this sort on those items puts the price of said items closer to what they'd be were the Chinese and Japanese engaging in illegal currency manipulation.
Just as the protectionist law Smoot-Hawley Tariff Act did, another one will cause other nations to enact their own protectionist laws.
Given Clinton raised taxes (the largest tax raise in history if the Republicans are to be believed) and he left office with a robust economy and a balanced budget
Given that Clinton raised taxes in 1993 and the boom in the economy was in the later '90s, it's more likely the 1997 tax cuts did more.
and Bush reversed all Clinton's taxes (and many other policies) resulting in enormous tax reductions, and he left office with a busted economy and unemployment rapidly approaching 10% I find it difficult to understand how anybody can still be pushing supply side economics
HAHA! In 1997 when Clinton was still president, not only were taxes cut but the economy boomed. The economy started souring, was in a recession, at the end of his terms in office, not on Bush's watch.
I would put in a law that requires some percentage of any product consumed in the US (say for products with $100 Million gross) must be produced at least at the 25% level (of products consumed by US people) by US workers.
Doing so would result in other nations retaliating and thus shut down trade. That, like the Smoot-Hawley Tariff Act wich had a hand in making the Great Depression worse than it otherwise would have been, would cause another depression. Maybe one in five US employees depends on exports and you would have many of them lose their jobs. Caterpillar has some stats on US exports. They like GE and other companies export a lot to China. Here's a list of United States Exports by Product Section in US Dollars from 2001 to 2005.
forgive some of us for being skeptical that additional cuts on payroll taxes will have any major effect.
Sure, be skeptical cuts in taxes will have major effects. But keep that skepticism when it comes to raising tariffs as well. Actually it behooves people to be more skeptical of raising tariffs. Raising tariffs will prompt other nations to raise their own tariffs in retaliation which can hurt everybody.
Problem? No external market for our goods (Smoot Hawley).
Ah, someone else who's heard of the Smoot-Hawley Tariff Act.
Basic problem(s)?
* China until last week was suppressing their currency. (Destroyed a lot of american jobs- will probably cost china a half a trillion dollars tho)
* Without China currency being suppressed they STILL will cost less. Ultimately our wages (and then costs) must drop towards chinese levels.
US wages might drop if that were the end of it, but it's not. Prior to the recession Chinese wages and pay were raising, as were Indian pay. Both nations not only have billionaires listed in Forbes and Fortune as well as millionaires, but they both also have growing middle classes. China's middle class growing fast.
we already have too many degreed people.
Impossible. There can not be too many people with degrees, but there can be many people applying for the same jobs.
China and India are pumping them out like crazy.
But how capable are they? For instance, their programmers. Are they only code monkeys or can they identify a problem and create a solution?
I believe trade, freer trade anyway, can equalize people's pay. But I have no problem with that. I'd like to see an economy where the hardest financial decision those willing and able to work has is whether to spend a month in Spain or China on vacation. Or to get a Tesla Roadster, or whatever it's competition will be. Or maybe pinch pennies to save and invest everything they can so they can retire when they reach 50.
The trouble with these type of taxes is that the corporations simply pass it onto the customers. Unless a huge tax is placed on the products, it will still be cheaper overall to offshore labor and charge consumers more. There are three scenarios:
You left out the most important scenario, other nations pass their own protectionist laws. Thus a new trade war will lead to Great Depression II just as the Smoot-Hawley Tariff Act, signed in 1930, made the Great Depression as bad as it got.
That's slippery-slope nonsense. Market-based economies have employed tariffs and other restrictions on trade for hundreds of years without falling into Communism.
And the markets with tariffs and regulations are not free markets.
I'm advocating for tariffs and regulations and you're arguing against a centrally planned Soviet-style economy.
What are tariffs and regulations if not central planning?
Global free trade is one of those things that sounds really good in theory, but in practice ends up driving down wages everywhere,
I'm glad I don't rely on you for economic advice, with such a poor understanding of economics there's no way you're an economist. Fact is is free trade, which does not exist today, increases people's wages.
Slashdot Mirror
Free trade hasn't gone anywhere, we don't have free trade. Or free markets. If we did bad banks would have been allowed, or forced, to declare bankruptcy or be bought out. AIG would be gone. The same with Detroit auto makers. Then better run companies would have risen to the top.
Falcon
U.S grown rice doesn't even meet my fucking standards.
You're getting the wrong rice. Try wild rice from Minnesota. That or other wild rices.
Falcon
It's nice to blather on thinking you know something but in fact you do not.
Yes it is. And that exactly what you're doing.
Witness the epic economic collapse of the banking industry in 2008. Free market forces at work that ripped $2 TRILLION dollars from our treasury and countless BILLIONS of dollars of people's savings, property values, jobs...the economic tsunami was unprecedented.
Not one of those bailouts happened in a free market. In a free market those banks, insurance companies, and Detroit would have been allowed to fail. Then businesses that were run better would have come to the top. In a free market multi-millionaires would not have received millions more in federal handouts.
Falcon
Income stocks *were* a good place for your retirement money. They may be again- but for the near to mid term future, you risk losing 20 to 30% of your retirement money owning in come stocks. You risk losing just as much in bonds because once interest rates start rising they are going to lose a lot of value. And you can't get better than about 2% in CD's.
I cited 2 income stocks, both with better returns than those 2% CDs, the lower return being almost 4%. For more examples do what I did, Google income stocks. Right now the first result is the definition of "income stock" given by investopedia and the second Stocks For Income Investors In 2010. I didn't check it out but the third result is the Fool's 5 Stocks for Strong Income. Now while those links may be from people who have their own agendas, such as trying to have stocks they own rise in price before they're dumped so does Warren Buffet. I say that even though what I know about him I like. The same with George Soros. Now do you think they have the same outlook on investments? Here's the portfolio at Soros Fund Management LLC.
I'm using a mixture of approaches ... dividends as you suggest (I'm 17 years from retirement), some dollar cost averaging, a big pile of cash, and a big pile in overseas investements as a hedge. And I'm getting debt free-- no house debt, no car debt. I'm already free of debt other than those and both of those are now quite low (I might be out in 24 months).
While the rest sounds okay, why the "big pile of cash"? As you said yourself inflation could gobble it up. One year's living expenses should be enough. But not just cash. Have 3 months in saving for ready cash, then have the rest in 6 month CDs that mature every 3 months. Of if a money market account offers higher interest then use that instead of CDs. If and when it comes down to it cutting out non-essentials, taking out odd or temporary jobs, and growing some of your own food should stretch that year of emergency funds out further.
And yes, gardening. Just this week even though it's still early I picked some greens in my garden for salad, leaf lettuce and mustard. Now I did buy some carrot, onion, and radish because it's too early for those and I tossed some sliced ham and turkey and well as grated cheese I bought too. However within a few more weeks I should have enough in my garden for more salad and other dishes. I have Roma tomato plants to make tomato sauces, yellow tomatoes for salad, and more for soups and salsa. For salsa, and soup, I also have tomatillos. Though it won't be much I hoping I can at least can a few quarts of them.
Oh, lest I miss it, you say you have no house debt, did you pay off a mortgage early or on tyme? If early, was the interest high? If so then it may of been better to refinance to a lower rate. With the one year emergency fund even if you lose your job and become unemployed you could still make your payments. Of course, you may feel better being debt free and having less risks. If so and that's important to you then go for it. Personally I wouldn't, but then again I can handle higher risks. So long as I have that year of funding I can get by.
Get by? HAHA Because I'm on disability and it is being messed with, so far this year I've only got money 4 out of 6 months and not once was it the full amount of my disability, I'm living week to week. I am glad
How much is a thousand dollars invested in 2000 worth now?
It's a little over negative 30%.
And how much will it be worth in 2020?
As I said in the post you replied to, if you are going to need money soon, it should be invested in income stock not growth stocks.
AEP, American Electric Power Company, Inc, closed at $32.39 today. Dividends paid out: $.41 for the quarter ending 31 March, with the same payouts the previous 4 quarters. For the year ending 31 March 2010 dividends paid were $1.24. At today's closing price that's a return of 3.83%, better than some interest bearing accounts.
AEE, Ameren Corporation, closed at $23.68. Dividends paid on 31 March 2010 was $.39 again with the same amount paid out over the previous 4 quarters. One year's payout was $1.56 with a return of 6.59%.
The current market behavior is likely to go on for another nine years in a secular bear market before we get another secular bull market.
Citation needed.
It's generally a bad idea to have your retirement income in stocks.
Excuse me but I did say that if you're close to retirement you have to adjust your investment portfolio. As as the above data shows, income stocks are a good place for investments for retirement.
We can't sustain our income advantage over the rest of the world. The difference is too large.
I never said I wanted to keep an income advantage over the rest of the world. I've actually pointed out in freer markets incomes will converge. Nor do I want any such advantage, in my original post that you replied to I said "I'd like to see an economy where the hardest financial decision those willing and able to work has is whether to spend a month in Spain or China on vacation. Or to get a Tesla Roadster, or whatever it's competition will be. Or maybe pinch pennies to save and invest everything they can so they can retire when they reach 50." I don't care if I don't have as much money as the next person, what I do care about is having enough money to live on and if I have children to give them the best chance for them to have a good life.
Falcon
Why should a poor person pay a greater percentage of his income as tax then a rich man?
On the contrary, the poor should be consuming less not more than the wealthy. The poor should be investing their money to improve their economics, by say going to school and getting trained then by investing some of the new money they're making. Ask yourself, how did the wealthy who did not have their wealth handed to them on a silver platter earn it? They earned it by working for it. By struggling to get an education or pinching pennies to invest.
Better tax system:
Everyone gets $X government check, this replaces all other government handouts. Everyone gets it.
Oh, come on. You can't really be seriously suggesting this. Government handing a couch potato the same amount of money as someone who breaks their backs in construction or the one who spends 4, 6, or 8 years in college to get a degree before getting a job. If a person can sit there watching TV all day why would they work? And why should I, you, or anyone else, support them?
Falcon
how do you decide how much of the military you are using? Or how do you decide how much of a safety net you need? Both of these things are things that a society (so a collective of people) need to work at together, and the government is exactly the body that we have erected to do things like this for us.
First, many of the things the US government does it has not constitutional authority to do. Second, I did not decide any spending, I oppose most of it. And no, the US government was not erected to do most of the things it does, otherwise the Founding Fathers would have included in things the government can do.
Maybe you're one of those expansionist who believe the constitution can be made to mean whatever you want it to instead of what it actually means. As Thomas Jefferson said: "To take a single step beyond the boundaries thus specifically drawn around the powers of Congress, is to take possession of a boundless field of power, no longer susceptible of any definition."
Short of radically cutting back on social services (and thus bringing back the worst of our capitalistic days where Civil War widows were living on the streets in great numbers), this is just not going to happen.
Oh, I absolutely have to ask for citations about this, otherwise it's FUD.
Falcon
You must be trolling, putting all these words I never said in my mouth.
Falcon
Fairtax is a scam whereby the rich don't pay their fair share and the rest of us end up picking up the tab.
Another person who fell for the myth that the wealthy paid little taxes. The Top 1% Pay More Income Tax Than Bottom 90%.
23% sales tax is enough to kill pretty much any economic activity.
Yet you'd have people pay even more in taxes. The tax on the top income in the US is 35% of their salaries, bonuses and business income. And those numbers are from the pseudo (fake) liberal New York Times.
Falcon
Why shouldn't taxes punish people for negative externalities? For example, gas taxes are a more free-market way of limiting smog from cars than mandating that every new car have a certain fuel economy or telling the manufacturers every car needs to be a hybrid.
I agree with you about discouraging people for negative externalities but fuel taxes are a poor example. Fuel taxes don't pay enough to maintain roads as it is.
Furthermore, pretty much all of the taxes you pay do go to stuff the government pays for that you have previously benefited from (public education), are benefiting from (the military, police, fire protection, roads), or will benefit from (Social Security, Medicare, federally funded research).
Now here I disagree. First the federal government has no constitutional authority to provide or regulate education. Leave education to local and state governments, which can and should use property taxes to fund. State and local governments should also pay for most roads with property and fuel taxes. Property tax pays for the building of the roads then the fuel tax pays for maintenance. Property tax should also pay for firefighters and police. Going back to the feds, the military should be significantly reduced in size. We don't need military bases all over the world. Close the bases in Japan for instance and require South Korea to reimburse US military costs there. Then with Social Security, it should be privatized, that was one item on a very short list of what Bush wanted to do that I supported. Medicare? It sucks, yet congress and Obama want to make everyone's health care just as bad. And yes, I know it sucks as I am on it myself. If government really wanted to help people with health care and insurance it would have mandated a freer market in insurance and gave those unable to afford it credit to buy insurance in the market. The feds shouldn't be funding research either, but since it does the research should be open sourced so anyone could use it. A flat tax, or better a sales tax, and user fees could fund the rest of what the feds do that are constitutionally authorized. Like the greatly reduced in size military. And the fuel tax paying for roads.
Falcon
All you need is one good bout of inflation and you can kiss your retirement goodbye.
Combined with low rates on savings, there is not a lot you can do to avoid that freight train on the way (it also wipes out pensions and social security too).
Inflation will only wipe out savings if the investment decisions made are poor and a number of other things happen at the same tyme or in close sequence. Though down from it's peak the Dow Jones Industrial Average is still way higher today than it was in 1973. A thousand dollars invested in 1973 is worth $10,000 today, at it's peak the investments would have been worth $14,000. And in 5 years it may be back up there. Now if you're going to be retiring in 5 years it's a good idea to have a big part of your investment portfolio in income stocks, companies that regularly pay out dividends. Utilities are pretty good. If however you still have 30 years before retirement simple regular investments in growth stocks using dollar cost averaging will keep you in good company.
Obviously today people don't save and invest much and instead expect government, ie other workers, to pay for their retirement.
They are capable. They have issues. They are half a world away. But it's idiotic chauvinism to assume they won't be equivalent within five or six years.
I agree but they'll also be demanding higher pay. By then US companies may decide it's cheaper or financially better to employ US workers. Tesla is opening a plant in CA, as I bet other businesses will do too. Hell, Detroit automakers have to compeat with Japanese makers that have and are opening plants in the US. States compeat with each other to lure them to the state.
Falcon
The correct way of looking at this is that there will be a shift from offshore to onshore production
The correct way is to realize other nations will retaliate. Many of the one in five US employees will see their employers harmed by other nations raising their tariffs.
Falcon
And to raise import tariffs will cause many more jobs to be lost. Caterpiller, General Electric, and other businesses employ thousands of workers, about one in five. And they depend on exports. "Caterpillar sells China some of its most sophisticated, and therefore expensive, American-made equipment, including giant bulldozers, large mining trucks and gas turbines." GE has been providing the turbines for China's Three Gorges Dam. They, and their employees, can say goodbye to their exports.
Falcon
Haven't you heard of the Smoot-Hawley Tariff Act? When the US passed it in 1930 other nations passed their own protectionist laws. That made the Great Depression worse than it would have been.
And yes, I do support getting rid of a lot of the free trade stuff (NAFTA, etc.) and imposing more tariffs.
And no, NAFTA is not and never was free trade. If you want to complain about NAFTA complain about how because of the billions of dollars agricultural businesses receive in farm subsidies they are allowed to dump corn in Mexico cheaper than Mexican farmers can grow corn.
Falcon
Consumers are already paying for the degenerate practice of shipping jobs overseas.
Yea, they get to buy cheaper goods. And the one in five employees who work for an exporter like Caterpillar and GE get to keep their jobs.
Putting a tax of this sort on those items puts the price of said items closer to what they'd be were the Chinese and Japanese engaging in illegal currency manipulation.
Just as the protectionist law Smoot-Hawley Tariff Act did, another one will cause other nations to enact their own protectionist laws.
Falcon
The government has made it illegal for the American worker to compete. What is 'free' about that.
I have said many tymes there is no free market or free trade. Can you point out when I said we do have them?
Falcon
Given Clinton raised taxes (the largest tax raise in history if the Republicans are to be believed) and he left office with a robust economy and a balanced budget
Given that Clinton raised taxes in 1993 and the boom in the economy was in the later '90s, it's more likely the 1997 tax cuts did more.
and Bush reversed all Clinton's taxes (and many other policies) resulting in enormous tax reductions, and he left office with a busted economy and unemployment rapidly approaching 10% I find it difficult to understand how anybody can still be pushing supply side economics
HAHA! In 1997 when Clinton was still president, not only were taxes cut but the economy boomed. The economy started souring, was in a recession, at the end of his terms in office, not on Bush's watch.
I would put in a law that requires some percentage of any product consumed in the US (say for products with $100 Million gross) must be produced at least at the 25% level (of products consumed by US people) by US workers.
Doing so would result in other nations retaliating and thus shut down trade. That, like the Smoot-Hawley Tariff Act wich had a hand in making the Great Depression worse than it otherwise would have been, would cause another depression. Maybe one in five US employees depends on exports and you would have many of them lose their jobs. Caterpillar has some stats on US exports. They like GE and other companies export a lot to China. Here's a list of United States Exports by Product Section in US Dollars from 2001 to 2005.
Falcon
forgive some of us for being skeptical that additional cuts on payroll taxes will have any major effect.
Sure, be skeptical cuts in taxes will have major effects. But keep that skepticism when it comes to raising tariffs as well. Actually it behooves people to be more skeptical of raising tariffs. Raising tariffs will prompt other nations to raise their own tariffs in retaliation which can hurt everybody.
Falcon
We've already seen that these kinds of tax break "incentives" don't work.
We've also seen raising tariffs don't work either, instead they lead to trade wars. Each "side", nation, raising it's tariffs harms everybody.
My company gets the R&D tax credit and they still sent a few thousand jobs to China this year.
Yet, China's middle class growing fast, and as it does their demands for higher pay grows too.
Falcon
Problem? No external market for our goods (Smoot Hawley).
Ah, someone else who's heard of the Smoot-Hawley Tariff Act.
Basic problem(s)?
* China until last week was suppressing their currency. (Destroyed a lot of american jobs- will probably cost china a half a trillion dollars tho)
* Without China currency being suppressed they STILL will cost less. Ultimately our wages (and then costs) must drop towards chinese levels.
US wages might drop if that were the end of it, but it's not. Prior to the recession Chinese wages and pay were raising, as were Indian pay. Both nations not only have billionaires listed in Forbes and Fortune as well as millionaires, but they both also have growing middle classes. China's middle class growing fast.
we already have too many degreed people.
Impossible. There can not be too many people with degrees, but there can be many people applying for the same jobs.
China and India are pumping them out like crazy.
But how capable are they? For instance, their programmers. Are they only code monkeys or can they identify a problem and create a solution?
I believe trade, freer trade anyway, can equalize people's pay. But I have no problem with that. I'd like to see an economy where the hardest financial decision those willing and able to work has is whether to spend a month in Spain or China on vacation. Or to get a Tesla Roadster, or whatever it's competition will be. Or maybe pinch pennies to save and invest everything they can so they can retire when they reach 50.
Falcon
The trouble with these type of taxes is that the corporations simply pass it onto the customers. Unless a huge tax is placed on the products, it will still be cheaper overall to offshore labor and charge consumers more. There are three scenarios:
You left out the most important scenario, other nations pass their own protectionist laws. Thus a new trade war will lead to Great Depression II just as the Smoot-Hawley Tariff Act, signed in 1930, made the Great Depression as bad as it got.
Falcon
Which one, the Dutch East India Company or the British East India Company? Or do you mean the fictional one in the Pirates of the Caribbean (film series)?
Falcon
If you send work off shore, you no longer get all the corporate welfare tax breaks that US companies get.
Most corporations shouldn't be getting subsidies period!!! And when they do the subsidies should only be temporary.
Falcon
That's slippery-slope nonsense. Market-based economies have employed tariffs and other restrictions on trade for hundreds of years without falling into Communism.
And the markets with tariffs and regulations are not free markets.
I'm advocating for tariffs and regulations and you're arguing against a centrally planned Soviet-style economy.
What are tariffs and regulations if not central planning?
Falcon
Global free trade is one of those things that sounds really good in theory, but in practice ends up driving down wages everywhere,
I'm glad I don't rely on you for economic advice, with such a poor understanding of economics there's no way you're an economist. Fact is is free trade, which does not exist today, increases people's wages.
Falcon