So far…Trump is amazing…

[BeerParticipant 11832]

FrankOne wrote:

The problem with high import tariffs is they spur your competitors to do the same. This spawns a trade war. domestic companies that rely heavily upon export markets then go bust.

The problem I have with foreign trade is the large trade DEFICITS over long periods of time. Because we use fiat currency, these deficits can exist. Such imbalances cannot persist if you don’t have fiat currency.

We have ran a trillion dollar trade deficit with Mexico since NAFTA was passed, and lost who knows how many middle class manufacturing jobs. Why complain about a trade war when NAFTA was volunteering to bring a knife to a gun fight?

FrankOne wrote:

Lowering corporate income tax WILL surge growth, but don’t expect the Republicans to have the guts to actually cut spending in lockstep with taxes. There have been temporary, token cuts, which I applaud — like EPA grants and contracts. But if they cut taxes without spending cuts — and I don’t mean discretionary — sure we should eliminate funding to entities such as the National Endowment for the Arts — but doing so won’t balance the budget. Entitlements and military outlays would need to be reduced.

Its not even so much military spending that is killing us as much as people think…its social security and medicare the boomers left in awful shape and now are expecting to collect in full on. Look at interest on our debt as well…2015 was a 0% interest rate…the Trump administration is facing not only a larger debt since 2015 but higher rates. This chart obviously makes a lot of assumptions as its predicting the future but it assumes 3.6% interest rates by 2026…

Even if we spent nothing on the military, which we all know would be an awful decision for obvious reasons, we are still going to be in a position where 3/4 of our budget is going to be interest payments, healthcare, and social security. Sadly politicians have refused to address these issues for so long that when they do go after them people aren’t going to like the results, where as if they modified them 10-20 years ago the pill would have been much less bitter. Of course we can kick the can down the road further but that is only making things worse…wtf will future generations going to do when interest payments are 30% of the budget?

[FrankOneParticipant 1418]

Beer: I’d say it’s a bit more complicated; the deficit with Mexico is about $60 billion per annum, but our EXPORTS are $212 billion, imports $270 billion. Back in 1990 before NAFTA, trade was only 1/7 those exports or $28 billion. So has the huge surge of exports on net, created jobs? It’s hard to say, because exports would have risen some, even without NAFTA. Admittedly, we actually had a small trade SURPLUS before NAFTA, whereas now, we had a deficit. ‘Production Sharing’, unique to US-Mexico, whereby we export parts for say, automobiles, then import back finished cars, further muddle these figures — estimates are that about 40% of the contents of imports were originally produced in the US bringing us close to trade parity. The other factor that complicates simple comparisons is many of the transnational corporations that profit, are US based — so the profit often goes back to US companies.

Really, how much of this populism is just driven by outright racism? After all, we have virtually the same trade deficit with Germany as we have with Mexico, but Trump isn’t bitching about that. https://www.census.gov/foreign-trade/balance/c4280.html a $60 billion whopper per annum. And keep in mind, that is on a much SMALLER volume of total trade AND there is no Production Sharing. If Germany can be a competitive manufacturer even with high labor costs, why can’t the US?

I am pro free trade. To make America more competitive, LOWER the taxes (especially corporate), REDUCE the regulatory burden, and improve the infrastructure.

Sure, we could close off all our borders, and be an island. What would happen? Industries like textiles would come back. Clothing would be made here. But the flip side is, we’d probably be spending 4-5% of our income on clothes like we did in past decades and jeans would be $50+ a pair. And those industries heavily relying on exports would wither. On NET, people are better off with free trade, than without. But certain industries hit by imports, certainly are NOT — take US manufactured steel for example which has been pummeled.

Trade deals should NOT be thousands of pages of special exceptions (like TPP Trans Pacific Partnership) to win favor from certain industries. Hell, the special interests wrote the goddamn thing. It was dead on arrival for Senate ratification, with or without the Donald, of course.

Yes, I am familiar with relative outlays by our Federal Masters — pie chart is great to bring to discussion though. As I said in my last post, the biggest piece of the pie is what I generically termed ‘Entitlements’ — social security (FDR’s ponzi scheme) + Medicare + unemployment + other giveaway schemes = ~60%. Add military expenses to them and you’re at 76%. Really, more like 80%+ since interest on debt should be attributed to past overspending in these areas and veterans benefits would be much lower with a military focused on defense instead of ‘optional’ foreign wars. So I’m all for cutting the other 20% to the bone, it just isn’t that big a piece of the pie to start with. Entitlement cuts are essential. But to get bipartisan buy-in there would need to be military cuts too.

I also agree wholeheartedly on debt reduction, but Republicans won’t cut deep so expect continued deficits. Obviously, Democrats don’t cut at all so they don’t address it either. The general public doesn’t understand the significance of your second plot, and its ramifications for long term economic growth — voters don’t REALLY give a s~~~ about it, or they’d elect Congressmen who vow to balance the budget. I like to tell people, ‘We’re turning Japanese’, and by that, I mean debt : GDP ratios. We topped 100% a couple years ago. Japan is at 229%. Maybe our congressional ‘leaders’ want us to ‘beat’ Japan by having an even higher debt to GDP ratio? Haha. Looking at a past survey, about 68% of democrats are Keynesians and want to ‘spend to create jobs’ but note a WHOPPING 30% of Depublicans believe the same! http://www.huffingtonpost.com/2010/11/11/were-deficits-really-vote_n_782266.html — I believe high GDP to debt ratio translates to s~~~ty economic growth and less investment in private companies. I really and truly hope I’m wrong about the Republicans. Last time they were in power Jackass Gingrich spent his time trying to impeach Slick Willy for Fornication Nation instead of focusing on creating prosperity and leaving the presidential indiscretions in the closet… I know, slick willy did lie under oath. But really, his best moment was wagging that finger ‘Aye did not have sex you all reee lations with that woe man’, haha. Gingrich should have just agreed to have the RNC to fund an escort whenever he needed it if he agreed to reduce government spending and regulations. True buy-partisan-clit?

[BeerParticipant 11832]

FrankOne wrote:

So has the huge surge of exports on net, created jobs? It’s hard to say, because exports would have risen some, even without NAFTA. Admittedly, we actually had a small trade SURPLUS before NAFTA, whereas now, we had a deficit.

Its rare that Fox news and Huffington Post agree on something…but one thing they both agree on is NAFTA caused us to lose jobs. Hell no I don’t think increased exports created enough jobs to offset the losses when our imports have increased faster than our exports. We didn’t win at all by going from a surplus to a deficit. Bill Clinton thought NAFTA was an opportunity to sell American made goods to our neighbors. It didn’t work that way. Our companies just left for lower taxes and cheaper labor costs to sell the same crap right back to us. Its a bad policy. Besides…nobody is saying to end all trade with Mexico…NAFTA is just a s~~~ty agreement we are losing on, so what is the harm in securing us better terms?

FrankOne wrote:

Really, how much of this populism is just driven by outright racism? After all, we have virtually the same trade deficit with Germany as we have with Mexico, but Trump isn’t bitching about that.

Well…its funny you mention that…because…

http://www.reuters.com/article/us-usa-trump-germany-autos-idUSKBN1500VJ

So there goes your racism theory.

I think its actually more along the lines of companies aren’t closing shop and moving to Germany to make the same products cheaper and sell them back to us tax free. That…and Germany isn’t our number one importer of illegal drugs and illegal immigrants.

FrankOne wrote:

‘Production Sharing’, unique to US-Mexico, whereby we export parts for say, automobiles, then import back finished cars, further muddle these figures — estimates are that about 40% of the contents of imports were originally produced in the US bringing us close to trade parity.

But what happened before that…we just built the parts and the cars here. Granted unions played a part in this as well driving labor costs up to ridiculous levels, but we essentially just shipped jobs to Mexico on this deal…there isn’t any parity here. We’d have won if we were exporting more cars to Mexico than we were importing from Mexico…but that isn’t the case.

FrankOne wrote:

I am pro free trade. To make America more competitive, LOWER the taxes (especially corporate), REDUCE the regulatory burden, and improve the infrastructure.

And we have done exactly none of these things post-NAFTA.

FrankOne wrote:

Sure, we could close all our borders, and be an island.

Nobody is suggesting this. Even if we were to pull completely out of NAFTA, do you think all trade with Mexico would come to a screeching halt?

FrankOne wrote:

So I’m all for cutting the other 20% to the bone, it just isn’t that big a piece of the pie to start with.

Well to be fair…this 20% can’t fix the problem yet it gets all the attention. We either have to start growing the economy at 8% a year, or we have to cut ss/medicare, or out debt is going to eventually crush us. It just really sucks for my generation that boomers voted for politicians their entire lives who underfunded/mismanaged these programs and now as they retire they expect payment in full with money that isn’t there because they didn’t put it there. I just hope that since my generation outnumbers the boomers now, enough of us give boomers the big old middle finger and slash their benefits…I don’t want to waste my life paying more for less just to fund retirement benefits for someone that wanted to pay less for more.

FrankOne wrote:

The general public doesn’t understand the significance of your second plot, and its ramifications for long term economic growth — voters don’t REALLY give a s~~~ about it, or they’d elect Congressmen who vow to balance the budget.

Yup…this is the sad truth for the average person. As far as I’m concerned we could make some mild cuts now that people will feel, but it won’t be the end of the world and at least we have the ability to pick and chose and make the least painful cuts, or we can keep kicking the can down the road and each year we continue to run a deficit puts us that much closer to when our system collapses and there will be massive, uncontrollable cuts. What sucks though is that the majority of the people who put this country on such a f~~~ed up path will probably be dead before it happens…they’ll just get to live a life of entitlement and pass away without ever paying the price while royally f~~~ing over future generations. Its kind of ironic that the constitution frees us from the debts of our parents…unless our parents ran up that debt through government spending and unfunded entitlements.

[FrankOneParticipant 1418]

Beer writes: Its a bad policy. Besides…nobody is saying to end all trade with Mexico…NAFTA is just a s~~~ty agreement we are losing on, so what is the harm in securing us better terms?

I think better terms are good and applaud re-negotiating agreements. I’m just not convinced international trade is as bad as it’s made out to be, in that we benefit from lower cost goods. I do understand though, with extreme trade deficits and when we are well below total employment, such ‘benefits’ are diminished — if nobody has a job they can’t afford the cheap imports.

Is it really a ‘s~~~ty agreement’? And are ‘jobs’ the be-all and end-all? If we restrict Chinese imports and again make clothing in the Northeast, or somewhere else in the US, will we, on net, benefit? We may well be closer to total employment BUT all be poorer, because our dollars, buy less goods, due to higher prices.

How is manufacturing moving to Southern States that are lower wage (fewer unions) any different? Should we have unencumbered trade between the several States? I suppose it’s different only in that there is no net trade deficit.

Point well taken on German imports, it looks like Trump IS looking at all trade deficits. Of course, China is the 500 lb gorilla but Japan and Germany are in the top 5.

I think its actually more along the lines of companies aren’t closing shop and moving to Germany to make the same products cheaper and sell them back to us tax free. That…and Germany isn’t our number one importer of illegal drugs and illegal immigrants.

I would argue we should actually allow MORE immigrants into the US — but skilled workers, and those that WORK. The US was built on immigrants. The least desirable, to me anyway, are the ‘political refugees’, who are often heavily subsidized and don’t seem to assimilate very well — at least that’s what I see locally. I’m all for taking the best and brightest entrepreneurs from all over the world to start companies here.

Exchange rates and labor costs play a major role in where multinationals locate. The answer to illegal drugs is to just make it all legal. And get rid of the DEA, another useless federal agency.

But what happened before that…we just built the parts and the cars here. Granted unions played a part in this as well driving labor costs up to ridiculous levels, but we essentially just shipped jobs to Mexico on this deal…there isn’t any parity here. We’d have won if we were exporting more cars to Mexico than we were importing from Mexico…but that isn’t the case.

But did we produce fewer, more expensive, less reliable cars before large scale international trade? Did this lower the standard of living for everybody else outside of Michigan? Let’s take a concrete example: California passes a law, mandating cars driven there must be manufactured there. Labor costs and the regulatory burdens, are obviously high in the People’s Republic of California. Will it help or hurt the State economy? Well, employment would go up, but purchasing power down — I’ll be able to afford less stuff since I had to pay more for my car as a Cali resident.

And we have done exactly none of these things post-NAFTA.

Yes, I can’t argue with you there. If you want to avoid the ‘giant sucking sound’ of jobs going overseas (or even to lower cost States as we’ve seen in manufacturing), the alternative approach is to make America/your State more competitive. I sincerely hope the Republicans engage in this sort of strategy, but I’m not seeing much of it thus far.

Well to be fair…this 20% can’t fix the problem yet it gets all the attention. We either have to start growing the economy at 8% a year, or we have to cut ss/medicare, or out debt is going to eventually crush us. It just really sucks for my generation that boomers voted for politicians their entire lives who underfunded/mismanaged these programs and now as they retire they expect payment in full with money that isn’t there because they didn’t put it there. I just hope that since my generation outnumbers the boomers now, enough of us give boomers the big old middle finger and slash their benefits…I don’t want to waste my life paying more for less just to fund retirement benefits for someone that wanted to pay less for more.

I agree, the so-called ‘discretionary spending’ (this 20%) really p~~~es off conservatives or ‘energizes the base’ — the National Endowment for the Arts funding ‘P~~~ Christ’, etc. So Republicans WILL make cuts there. I’m ALL for getting rid of entities such as this because I don’t believe government should dictate what is Art one way or the other. So discretionary spending p~~~es me off too, but like you I recognize it’s a tiny sliver of the pie.

As for crushing debt, yep, that’s what I mean when I say ‘we’re turning Japanese’. Or Greek. Take your pick. Sure, it sucks that we’re (and especially YOUR, you are probably younger than me) stuck with the ‘bill’, so to speak — I’m 47 years old, basically I am planning for social security to be kaput when I retire. I call Social Security ‘FDR’s ponzi scheme’, a bit inflammatory, but there you have it. It’s a ponzi scheme because it requires more new ‘investors’ to pay out previous ‘investors’ and it is not fiscally sound. And the money isn’t actually invested in vehicles providing high return. Personally, I’d just like the option to ‘take the hit’ for Uncle Sam, i.e. opt out of future payroll deductions if I give up, say, 30% or 40% of my future ‘benefits’. And stop enrolling new suckers, err ‘people’. But taxes must pay something to current beneficiaries so you’re stuck… And retirees are a huge voting bloc that must be satiated to win elections.

Health care ‘reform’ will be a Statist, not a market, solution even from Depublicans, instead of de-regulation of the industry and the rise of free markets.

Yup…this is the sad truth for the average person. As far as I’m concerned we could make some mild cuts now that people will feel, but it won’t be the end of the world and at least we have the ability to pick and chose and make the least painful cuts, or we can keep kicking the can down the road and each year we continue to run a deficit puts us that much closer to when our system collapses and there will be massive, uncontrollable cuts. What sucks though is that the majority of the people who put this country on such a f~~~ed up path will probably be dead before it happens…they’ll just get to live a life of entitlement and pass away without ever paying the price while royally f~~~ing over future generations. Its kind of ironic that the constitution frees us from the debts of our parents…unless our parents ran up that debt through government spending and unfunded entitlements.

Yes, for me it is my #1 litmus test. But neither party is offering up this ‘choice’. You have to understand, you have a sublime understanding of economics compared to the average citizen — they don’t see or care about lost future growth or understand what 3% growth means over 30 years vs, say 1.5% growth.

I’d actually prefer to vote not on people,but on what percent of GDP taxes and spending should comprise each year, and where they are to be sourced from. I’d also prefer it if only people who paid, say, $5,000 of taxes, got to vote. That is very different than a voting AGE. So many students might not get to vote until their early 20’s under such a scheme. And some retirees would not get to vote (I wouldn’t allow voting based on ‘taxes’ ‘paid’ from social security or other government benefits to count against the threshold. And I don’t think public sector employees should get to vote at all, because it is a conflict of interest, unless they paid $5,000 or more in taxes from other income. I also think voting should be proportional to taxes paid, and that corporations that pay taxes should get to vote on how that money is spent. One advantage of the scheme I proposed is, that it is inherently NOT winner take all; my vote and yours will be averaged. So if I think the government spends way too much, I can just put down 0%, and the socialists can put down 100%.

Another way to do it would be NET lifetime taxes vs benefits you received from government. With that scheme, if you went to public school you’d be docked, say $10,000 per year. Public Uni, maybe $20,000. So somebody like me, would not get to vote until I was, say, around 30 years old. And citizens who received more lifetime benefits than they paid taxes, simply wouldn’t vote… ever. Even if it only covered ‘big’ items this would be great.

[BeerParticipant 11832]

FrankOne wrote:

I think better terms are good and applaud re-negotiating agreements. I’m just not convinced international trade is as bad as it’s made out to be, in that we benefit from lower cost goods. I do understand though, with extreme trade deficits and when we are well below total employment, such ‘benefits’ are diminished — if nobody has a job they can’t afford the cheap imports.

That is the thing though. Trump isn’t saying we aren’t going to trade with you, or that trade is bad…he’s just saying we are getting the s~~~ty end of the stick right now. Would it be all that bad if we turned a few of our deficits into surpluses and created some middle class jobs here?

FrankOne wrote:

Is it really a ‘s~~~ty agreement’? And are ‘jobs’ the be-all and end-all? If we restrict Chinese imports and again make clothing in the Northeast, or somewhere else in the US, will we, on net, benefit? We may well be closer to total employment BUT all be poorer, because our dollars, buy less goods, due to higher prices.

But you assume the average consumer is actually saving money from manufacturing abroad. Just an example…

Its not like the typical American is buying the cheapest sneakers they can and if price goes up we’ll all be in the poor house…we’re buying foreign made stuff with 500% mark ups.

Here is another one I like.

Meanwhile…Apple pays its Chinese employees about 2 dollars an hour. We could pay an American worker 10x that, not raise the price of an iPhone a penny, and Apple would still be running 40% profit margins on them.

Did you ever think…maybe globalization hasn’t really had much benefit for American’s and we are just getting gouged? Yeah personally I can win because I have plenty of disposable income to buy stock in Nike or Apple and benefit from their operations, but at the same time I don’t exactly think that its good in any way for the average consumer.

FrankOne wrote:

How is manufacturing moving to Southern States that are lower wage (fewer unions) any different? Should we have unencumbered trade between the several States? I suppose it’s different only in that there is no net trade deficit.

Companies moving from state to state isn’t a net loss for the country…just for states that are expensive to operate in. Unions are only the issue sometimes(like in the case of automobiles)…a lot of the time is simply because the state government is stupid. For example my state recently lost GE’s headquarters because our governor threatened them with higher taxes and a neighboring state offered them tax incentives to relocate. Guess which option they took lol. We’ve also got examples that aren’t even tax related…like some gun makers that have been operating in Northern states for over 100 years planning to move down south just because their current locations are so anti-gun. Why should gun manufacturers provide jobs and tax revenue to a bunch of liberal idiots who hate their product and does everything they can to hurt their business when you can just move to a more pro-gun state and be welcomed with open arms? Sometimes its not even about pinching the pennies believe it or not.

FrankOne wrote:

I would argue we should actually allow MORE immigrants into the US — but skilled workers, and those that WORK. The US was built on immigrants. The least desirable, to me anyway, are the ‘political refugees’, who are often heavily subsidized and don’t seem to assimilate very well — at least that’s what I see locally. I’m all for taking the best and brightest entrepreneurs from all over the world to start companies here.

Who ever claimed to be against immigration? Illegal immigration…yeah…but you can’t lump them in with the legal ones.

FrankOne wrote:

Exchange rates and labor costs play a major role in where multinationals locate. The answer to illegal drugs is to just make it all legal. And get rid of the DEA, another useless federal agency.

What happens when some drug addict overdoses? Taxpayers are forced to spend stupid amounts of money on his medical care and rehab. What happens when addicts do illegal s~~~ to get funds to buy drugs? Innocent citizens suffer. These things won’t go away. I’d rather my money just be spent trying to keep some of this s~~~ off the streets and throwing some of these losers in jail or getting them help before they require ridiculous money to be spent on their medical bills rather than paying for the aftermath of their stupidity. I’m still a firm believer one of the worst inventions of modern medicine is Narcan.

FrankOne wrote:

Personally, I’d just like the option to ‘take the hit’ for Uncle Sam, i.e. opt out of future payroll deductions if I give up, say, 30% or 40% of my future ‘benefits’. And stop enrolling new suckers, err ‘people’.

This is just another problem with the stupidity of the average person dragging us all down. If you say this…you obviously realize SS is a s~~~ “investment” and you could do much better just investing on your own, and that is very true. You are still young enough to fall into the same boat I will, where SS is going to get cut before we die and if we work til full retirement age we’ll be lucky to even get back dollar for dollar what we put into it. Meanwhile if we had 12.4% of our pay going into an IRA instead of towards SS we’d all be retiring millionaires.

[BeerParticipant 11832]

FrankOne wrote:

And citizens who received more lifetime benefits than they paid taxes, simply wouldn’t vote… ever.

I always thought it would be a great idea for people on welfare programs to temporarily lose their voting rights. If they get their s~~~ together and become a producer they’d gain it back after some time. It wouldn’t be stripping people of their right to vote as welfare programs are optional…it would simply prevent people from voting based on what is going to get them the most free s~~~ for themselves. Of course in a country where we can’t even manage to pass voter ID laws to cut back on fraud, I really doubt anything like this would ever happen lol.

“A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy.”

Tytler knew what the downfall of America would be over 200 years ago. Americans still don’t want to admit it to themselves.

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