Moderator: Charlie Phillips
sulavaca wrote:The West can play all the harder ball.
lbksig wrote:headhonchoII wrote:I think it comes down to spreading the wealth and jobs. If there not enough jobs being created or salaries are under pressure then that just kills the economy. Where are the jobs?
(US centric for a second)
Some are lost forever because productivity went up. Some are lost temporarily because they aren't needed now but may be needed in the future (real estate and construction are examples). Some are lost but could come back when the economy eventually recovers (retail jobs).
Demand is down so businesses aren't hiring. Demand is down because the economy was humming along thanks to a negative savings rate for so long which was unsustainable. Eventually someone will stop lending you money and there will be a correction. That time came and now consumers have cut back to pay down debt and rebuild savings. When we see sustainable spending levels that have around a 5% savings rate, consumer confidence will have risen to the point that businesses will look to expanding their workforce. Real estate and construction will take a long time to recover because there is a glut of properties on many markets right now.
That's all assuming that tax rates stay the same. That's where we can get away from US centric and look more worldwide. Higher tax rates encourage businesses to take actions to avoid them. They'll move jurisdictions, they'll hire temporary employees instead of full time employees, work their currently employees more rather than hiring new ones, not expand so they can stay beneath the line where higher taxes kick in, etc.
The debt situation in many countries is a serious hindrance to the economic crisis abating. Tax revenue is down in many locales because of the Recession. With lower revenue, but the same spending, the difference is made up in debt. If the government can't borrow the difference, they are left with a decision to raise taxes or fire workers. Governments don't like to fire employees, especially when they are unionized. They would rather raise taxes, but that reduces the available funds for businesses to use for hiring new workers, expanding, buying more product to sell, etc. Spreading the wealth through taxes will lead to fewer jobs than if you had low taxes and small government.
politbureau wrote: Automobiles for example. It's almost impossible for an American factory to produce a car for export to China due to the tariffs alone. If anything needs to be done now it's that the U.S. should take a hammer to China's unfair tariffs rather than erect tariff barriers of its own as the days when a country could turn itself into an isolated fortress against global economic forces are long gone. Particularly when that country is a high cost producer whose products and services can no longer compete on the global market.
Jack Burton wrote:politbureau wrote: Automobiles for example. It's almost impossible for an American factory to produce a car for export to China due to the tariffs alone. If anything needs to be done now it's that the U.S. should take a hammer to China's unfair tariffs rather than erect tariff barriers of its own as the days when a country could turn itself into an isolated fortress against global economic forces are long gone. Particularly when that country is a high cost producer whose products and services can no longer compete on the global market.
How similar is it in the end to the car market in the US regarding trade barriers notwithstanding your point on US' relatively simpler tariffs? Isn't it why Honda, Toyota builds factories in the US just as Ford in China? or is that different?
the taxpayers may want to factor in all the aid they extended to A.I.G. through the Treasury — $70 billion, though the company did not draw down all the credit lines. Or they may want to add the original $85 billion loan that came from the New York Fed in September 2008, in exchange for an 80 percent stake in the company
The cost of insuring against a default on U.S. government bonds via so-called credit default swaps rose 28% in the quarter ended Sept. 30, the firm said.
That puts the United States' third-quarter performance behind only two other nations, both of which are struggling with the early stages of sovereign debt crises: Ireland, whose CDS prices rocketed 72% to a record amid growing questions about the costs of a massive bank bailout, and Portugal, whose costs jumped 30%.
What's more, the decline leaves U.S. debt trading at an implied rating of double-A-plus for the first time in memory. . . .
sulavaca wrote:I'm only blowing my own trumpet here, as five years ago when I was going on about this people were calling me a conspiracy theorist. These days it seems more and more people are starting to willing to accept that this is now the case.