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Globalist Having A Meltdown Over Steel
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Owl 69/70/75 Offline
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Post: #61
RE: Globalist Having A Meltdown Over Steel
If we instituted a 15% consumption tax, our balance of trade would shift dramatically. That plus shale oil might be enough to put us into a positive trade balance. If we used the revenues from it to balance the budget, reduce income tax rates, and fund universal private health care following the Bismarck model, we would become a Mecca for world financial investment. Absolutely serious with all of that.
(This post was last modified: 03-07-2018 01:15 PM by Owl 69/70/75.)
03-07-2018 01:13 PM
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Brookes Owl Online
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Post: #62
RE: Globalist Having A Meltdown Over Steel
Amid all the trade deficit gnashing of teeth and rending of garments, is anyone going to talk about the other side of the ledger? How the deficit is offset by foreign investment? We buy their goods, what do they do with the money? They invest in American assets. This guys sums it up nicely...

Daniel Griswold Wrote:The most important economic truth to grasp about the U.S. trade deficit is that it has virtually nothing to do with trade policy. A nation’s trade deficit is determined by the flow of investment funds into or out of the country. And those flows are determined by how much the people of a nation save and invest - two variables that are only marginally affected by trade policy.

It's 20 years old but holds up well. Quite timely in fact:

Quote:When it comes to the U.S. trade deficit, there is no emergency. The current trade deficit is not a sign of economic distress, but of rising domestic demand and investment. Any quick fix by Congress is likely to do far more harm than good. Imposing new trade barriers against imports will only make Americans worse off while leaving the trade deficit virtually unchanged.
03-07-2018 02:21 PM
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Brookes Owl Online
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Post: #63
RE: Globalist Having A Meltdown Over Steel
...and circling back to steel, here's a nice kick in the pants:

Mark Perry Wrote:For the U.S. oil and gas industry, the problem with Trump’s 25 percent tariff on imported steel arises because the industry relies heavily on imported specialty steel for many of its needs that U.S. steelmakers don’t supply. Those multiple uses include steel for drilling, production facilities onshore and offshore, pipelines, liquefied natural gas terminals, refineries, and petrochemical plants.

Take pipelines. Trump’s tariff on imported steel would raise the cost of pipelines because the steel used in making pipelines must meet rigorous technical specifications to ensure that it doesn’t corrode or fracture during a lifetime that may exceed 30 years. According to the Association of Oil Pipelines, a trade group that represents owners and operators, more than three quarters of the pipeline used in the U.S. must be imported, either in the form of finished pipe or the raw material used to fabricate it in the U.S. The ability of domestic steelmakers to supply steel to the oil and gas industry is minimal, accounting for just 3 percent of the total amount of steel required by the industry in most years.

It’s estimated that a 25 percent increase in the cost of imported pipe, fittings, and valves would raise the cost of a 280-mile pipeline — typical of those needed to carry shale oil from the Permian Basin in Texas and New Mexico to Gulf Coast ports for export — by $76 million. For the giant Dakota Access Pipeline, the cost increase could be as much as $300 million.

Unintended consequences, I guess, for Trump's Energy Dominance Policy.
03-07-2018 03:12 PM
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Post: #64
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 10:41 AM)Tom in Lazybrook Wrote:  Guys are we the biggest loser in trade? Are we really?

Basically, we get cheaper goods and manufacturing inputs than the rest of the world. That helps us in many ways.

Depends on how you measure 'biggest loser'

This sort of mentality ignores that we are also one of the largest bases of raw materials in the world and that we have most of these manufacturing inputs already here.... so if we can't produce them HERE at a cheap enough cost to compete with those goods, then we certainly can't produce them and ship them to other countries and compete. More industries die... the value of those raw materials goes down so 'net worth' of the nation declines... etc etc etc.

(03-07-2018 02:21 PM)Brookes Owl Wrote:  Amid all the trade deficit gnashing of teeth and rending of garments, is anyone going to talk about the other side of the ledger? How the deficit is offset by foreign investment? We buy their goods, what do they do with the money? They invest in American assets.

They invest SOME of it in American assets... More importantly, they often take control of American assets (at least some) and engage in behavior that absolutely works for 'them', whether or not it works for 'us'.... i.e. Kia building an assembly plant 'here', but manufacturing the parts and technology 'there'. They have 2 engineers here for every 10 they have there. 2 manager here for every 10 there. Obviously I'm generalizing and not intending to represent actual figures, but it isn't hard to see that owners do what is best for 'them', and they live 'there'. They want access to our markets, but they don't need our natural resources or many of our people. If a trade war begins (small w), then the fact that they own investments here gives them some control.

What would Americans do with the money? Why wouldn't they also invest at least as much of it here? Wouldn't they tend to keep most of the higher paying jobs here as well?

Whether or not it is a crisis is a matter of risk aversion/perception.

I don't believe it is a crisis at all, but I also don't believe that it doesn't matter. I support energy independence as a matter of national security... even though oil is fungible and thus we don't 'need' their oil... their supply can dramatically impact our economy. I'd love to see us be a serious net exporter (or hoarder) of oil as a matter of national security. I'd say the same (though to a lesser degree) about steel etc.
(This post was last modified: 03-07-2018 03:17 PM by Hambone10.)
03-07-2018 03:17 PM
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Tom in Lazybrook Offline
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Post: #65
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 01:08 PM)Owl 69/70/75 Wrote:  Right now China desperately needs the US Navy to protect their oil supply line to the Middle East. They have zero ability to secure their own oil supply, without which they are serious trouble. And that serious trouble is spelled zero economy and widespread famine.

That's really not a immediate concern. There's no threat at this point and quite frankly, I can't think of a reasonable scenario developing in the medium term that would impact that against them specifically.

Quite frankly, I'd rather have China dependent upon the Arabs/Iranians than the Russians. The oil producers are really desperate to keep revenues flowing. Russia could shoot its economy in the foot in order to make a geopolitical grab against China, but that's also quite doubtful. The Arabs/Iranians? Highly unlikely.
03-07-2018 03:34 PM
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Tom in Lazybrook Offline
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RE: Globalist Having A Meltdown Over Steel
(03-07-2018 01:13 PM)Owl 69/70/75 Wrote:  If we instituted a 15% consumption tax, our balance of trade would shift dramatically. That plus shale oil might be enough to put us into a positive trade balance. If we used the revenues from it to balance the budget, reduce income tax rates, and fund universal private health care following the Bismarck model, we would become a Mecca for world financial investment. Absolutely serious with all of that.

Actually, I don't see how a consumption tax would help sell American products versus foreign ones. Unless you're setting up the consumption tax as an effective tariff. Basically, consumption would fall (as per the slope of the individual products' price demand elasticity. Consumption taxes can be highly detrimental to an economy.

And if you're proposing a tax switch to make our economy's tax structure even MORE regressive than it is now, then that's not likely to help our overall economy either. All it would do is funnel more money into the hands of the wealthy, who would save it (and invest a portion of it overseas) and not spend it in the economy. And that decline in consumption would be exacerbated by the fact that this tax would hit those with lower levels of discretionary income the hardest. Tax a rich man by 15% more and they'll probably largely keep spending as they have been. Tax a poor person 15% more, and they'll reduce consumption by a greater percentage of the 15% because they simply wont have the money.

I think its clear that the GOP has no interest in balancing the budget. The last 3 GOP Administrations have resulted in massive deficits (usually the result of deep tax cuts for the rich) that did little to grow the economy and left Obama with a nightmare financial crisis to spend another Trillion trying to fix. If you want a balanced budget, I think you're voting against the wrong party.

But then again, I don't want a balanced budget every year. I think Bush and Trump have gone too far with the deficits. But some deficits are good, so long as the money is invested in items that will grow the economy in the future. Trump's idiotic plan to just funnel money at his politically favored group in some sort of undefined 'infrastructure bill' is risible as an investment. Look at his plan and compare it to a business plan. Who in their right mind would choose to invest in a business plan with no details and no economic return metrics? Military spending and Social spending are not investments btw. Right now, companies are taking most of their tax cuts and investing them in stock buybacks. That's not an investment btw.

You seem to try to sell a balanced budget AND tax cuts. That's not really feasible, outside of some sort of Ayn Rand fantasy land. And in practice would destroy our economy because it would harm a great percentage of our public. Not just poor people.

As far as Universal Bismark....Unless there's HEAVY regulation, there will be very substandard health care for 90% of Americans. Because any profit making part of our health care system, from doctors, to hmos, to insurance companies, to hospitals, to pharma, have been allowed to exploit the extreme price INelasticity of demand. It doesn't matter what you do otherwise...so long as healthcare profit making entities can commoditize health care based upon the persons abilty to pay....they will find a way to say "Pay us all your assets or you kid dies". That's their model. And that's the only model that a private health care system without SEVERE regulation would engender.

Basic your plan combines economic austerity, a collapse in health care, falling standards of living for anyone but the very wealthy, and an absence of any social net.

That is a good way to end up with a backlash that would result in REAL (not the laughable accusation that Obama, Bernie or any Democrat are somehow Marxist level socialists) economic doctrinaire socialism. If people have no stake in the economic system, they'll be susceptible to the propaganda of fascist level nationalism/populism or radical socialism.
03-07-2018 03:56 PM
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Post: #67
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 01:02 PM)Tom in Lazybrook Wrote:  
(03-07-2018 11:32 AM)Attackcoog Wrote:  
(03-07-2018 10:41 AM)Tom in Lazybrook Wrote:  Guys are we the biggest loser in trade? Are we really?

Basically, we get cheaper goods and manufacturing inputs than the rest of the world. That helps us in many ways. Also, since the rest of the world appears willing to finance exports to us, seemingly forever, in our own currency....so guess what? Great, thanks for the heavily discounted stuff. And by stuff, I don't mean just TVs and Cars, but inputs as well.

And God forbid that a country with overcapacity and a overreliance on exports tries to actually harm our currency. THEY would be the big losers if they did so. During the 2008 financial crisis, Russia approached China to ask them to help them collapse the US economy by dumping treasuries. China told them "are you nuts?" and actually started buying them. Basically, most of the world is reliant, either directly or indirectly, on a strong dollar. And basically the US is making the world give us free, or heavily discounted, money as a result.

There's a reason why countries with high tariffs usually tend to suck. They tend to fight to keep industries that they aren't really competitive in at the expense of industries that they would be better competitors in. It also incentivizes workers to choose paths that aren't the best use of their talents, from an economic standpoint. Think of it as a form of "Dutch Disease".

I know, you're going to throw out China as an example of a country with high tariffs and a growing economy. Protectionism CAN work, but only in countries where the manufacturing value added is completely based upon price. China doesn't really innovate. China just tries to be the lowest cost provider of a good or service. That's great for getting from having a bottom 10 per capita income to a lower middle income pci, but then it always stalls. Because that game only works when your workers are making crap money. The reason China's growth has pretty much stalled is because they're reaching a stage of development where competing with Bangladesh on price is no longer much of an economic driver (to say nothing of a way out of poverty for the 800 million Chinese who live in households making less (usually far less) than 10,000 USD per year). To grow from a cheap manufacturer of basic goods to a middle income or developed economy, a transition has to take place where low cost manufacturing is substituted with value added manufacturing, innovation, and value added service provision. Japan and Korea made that transition. China? Not so much.

Yes, it can go too far, and yes, there will be winners and losers (especially workers in mature industries) from it, but there are definitely winners from our current low tariff policy. And I'd argue that the economy is better off as a result.

Oh, and the USA is a huge exporter of services, such as Consulting, Finance, etc. This really is where a lot of the higher paying jobs are and where much more value is for the American economy. That, too, can be a subject to what effectively can be called tariffs.

---


So Trump's economic policy appears to be doubling down on 150 year old technologies (Coal, Internal Combustion Engines, Steel) at the expense of innovative technologies that will grow our country at a faster rate. We're never going to be cheaper than Brazil or China or India on those things (at least I hope not - it would mean our workers would be making less than those counterparts), so I see no problem with letting them provide a greater share of those inputs at a lower price than we could make them ourselves....and....giving us heavily discounted money to buy them.

Here's the thing. You are looking at Chinese steel dumping as essentially thier government subsidizing end products in the US. Thats true. It does do that.

However, you need to ask the question---why would any government do that?

The answer is they dont see it as subsidizing your end products. They see it as BUYING your manufacturing base. It just takes awhile.

LOL. Another fun fact about mature industries. Like Steel, they're very difficult to monopolize. So China can try all they want to monopolize it.. Currently we import 2.3% of our steel imports from China. We can get t-shirts from any number of countries.

China subsidizes exports because they never figured out a way out of the dollar trap (or Euro trap) that impacts every single country that tries to manufacture their way from low income to high income. During phase 1, the poor but manufacturing country will run a trade surplus with the world. If they don't have a floating currency, they'll have to keep that surplus effectively in a foreign currency. China now has too many dollars and an economy where its so damn big that it requires them to keep exporting to the USA and Europe. They keep giving us discounted stuff because the alternative would be to destroy their economy

When people play the "China is an economic threat to the USA" card. I always like to ask them to pretend they're the head of the Bank of China and just try to do anything to the US that doesn't destroy their economy.

I think the reality is its really much higher than that. A lot of Chinese steel is imported from 3rd party nations that essentially act as distributors for Chinese steel.
03-07-2018 03:57 PM
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Post: #68
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 01:02 PM)Tom in Lazybrook Wrote:  
(03-07-2018 11:32 AM)Attackcoog Wrote:  
(03-07-2018 10:41 AM)Tom in Lazybrook Wrote:  Guys are we the biggest loser in trade? Are we really?

Basically, we get cheaper goods and manufacturing inputs than the rest of the world. That helps us in many ways. Also, since the rest of the world appears willing to finance exports to us, seemingly forever, in our own currency....so guess what? Great, thanks for the heavily discounted stuff. And by stuff, I don't mean just TVs and Cars, but inputs as well.

And God forbid that a country with overcapacity and a overreliance on exports tries to actually harm our currency. THEY would be the big losers if they did so. During the 2008 financial crisis, Russia approached China to ask them to help them collapse the US economy by dumping treasuries. China told them "are you nuts?" and actually started buying them. Basically, most of the world is reliant, either directly or indirectly, on a strong dollar. And basically the US is making the world give us free, or heavily discounted, money as a result.

There's a reason why countries with high tariffs usually tend to suck. They tend to fight to keep industries that they aren't really competitive in at the expense of industries that they would be better competitors in. It also incentivizes workers to choose paths that aren't the best use of their talents, from an economic standpoint. Think of it as a form of "Dutch Disease".

I know, you're going to throw out China as an example of a country with high tariffs and a growing economy. Protectionism CAN work, but only in countries where the manufacturing value added is completely based upon price. China doesn't really innovate. China just tries to be the lowest cost provider of a good or service. That's great for getting from having a bottom 10 per capita income to a lower middle income pci, but then it always stalls. Because that game only works when your workers are making crap money. The reason China's growth has pretty much stalled is because they're reaching a stage of development where competing with Bangladesh on price is no longer much of an economic driver (to say nothing of a way out of poverty for the 800 million Chinese who live in households making less (usually far less) than 10,000 USD per year). To grow from a cheap manufacturer of basic goods to a middle income or developed economy, a transition has to take place where low cost manufacturing is substituted with value added manufacturing, innovation, and value added service provision. Japan and Korea made that transition. China? Not so much.

Yes, it can go too far, and yes, there will be winners and losers (especially workers in mature industries) from it, but there are definitely winners from our current low tariff policy. And I'd argue that the economy is better off as a result.

Oh, and the USA is a huge exporter of services, such as Consulting, Finance, etc. This really is where a lot of the higher paying jobs are and where much more value is for the American economy. That, too, can be a subject to what effectively can be called tariffs.

---


So Trump's economic policy appears to be doubling down on 150 year old technologies (Coal, Internal Combustion Engines, Steel) at the expense of innovative technologies that will grow our country at a faster rate. We're never going to be cheaper than Brazil or China or India on those things (at least I hope not - it would mean our workers would be making less than those counterparts), so I see no problem with letting them provide a greater share of those inputs at a lower price than we could make them ourselves....and....giving us heavily discounted money to buy them.

Here's the thing. You are looking at Chinese steel dumping as essentially thier government subsidizing end products in the US. Thats true. It does do that.

However, you need to ask the question---why would any government do that?

The answer is they dont see it as subsidizing your end products. They see it as BUYING your manufacturing base. It just takes awhile.

LOL. Another fun fact about mature industries. Like Steel, they're very difficult to monopolize. So China can try all they want to monopolize it.. Currently we import 2.3% of our steel imports from China. We can get t-shirts from any number of countries.

China subsidizes exports because they never figured out a way out of the dollar trap (or Euro trap) that impacts every single country that tries to manufacture their way from low income to high income. During phase 1, the poor but manufacturing country will run a trade surplus with the world. If they don't have a floating currency, they'll have to keep that surplus effectively in a foreign currency. China now has too many dollars and an economy where its so damn big that it requires them to keep exporting to the USA and Europe. They keep giving us discounted stuff because the alternative would be to destroy their economy

When people play the "China is an economic threat to the USA" card. I always like to ask them to pretend they're the head of the Bank of China and just try to do anything to the US that doesn't destroy their economy.

Its not about destroying our economy. I dont think thats their intent. Their intent is to take higher paying blue collar jobs from us and give them to their people. Like I said, their intent is to "buy" steel jobs by subsidzing their steel to the point that other capitalist producers give up. It will never be a monopoly--but it doesnt have to be for this game to work. They have become the largest steel producer in the world (831 million metric tons). Nobody else is even close. The next closest competitor is the world is the ENTIRE EU which produces 162 million metric tons. No, China doesnt have a monopoly---but its an overwhelmingly dominant position in an industry we used to be a power player in. Their strategy worked.
(This post was last modified: 03-07-2018 04:12 PM by Attackcoog.)
03-07-2018 04:08 PM
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Tom in Lazybrook Offline
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Post: #69
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 04:08 PM)Attackcoog Wrote:  
(03-07-2018 01:02 PM)Tom in Lazybrook Wrote:  
(03-07-2018 11:32 AM)Attackcoog Wrote:  
(03-07-2018 10:41 AM)Tom in Lazybrook Wrote:  Guys are we the biggest loser in trade? Are we really?

Basically, we get cheaper goods and manufacturing inputs than the rest of the world. That helps us in many ways. Also, since the rest of the world appears willing to finance exports to us, seemingly forever, in our own currency....so guess what? Great, thanks for the heavily discounted stuff. And by stuff, I don't mean just TVs and Cars, but inputs as well.

And God forbid that a country with overcapacity and a overreliance on exports tries to actually harm our currency. THEY would be the big losers if they did so. During the 2008 financial crisis, Russia approached China to ask them to help them collapse the US economy by dumping treasuries. China told them "are you nuts?" and actually started buying them. Basically, most of the world is reliant, either directly or indirectly, on a strong dollar. And basically the US is making the world give us free, or heavily discounted, money as a result.

There's a reason why countries with high tariffs usually tend to suck. They tend to fight to keep industries that they aren't really competitive in at the expense of industries that they would be better competitors in. It also incentivizes workers to choose paths that aren't the best use of their talents, from an economic standpoint. Think of it as a form of "Dutch Disease".

I know, you're going to throw out China as an example of a country with high tariffs and a growing economy. Protectionism CAN work, but only in countries where the manufacturing value added is completely based upon price. China doesn't really innovate. China just tries to be the lowest cost provider of a good or service. That's great for getting from having a bottom 10 per capita income to a lower middle income pci, but then it always stalls. Because that game only works when your workers are making crap money. The reason China's growth has pretty much stalled is because they're reaching a stage of development where competing with Bangladesh on price is no longer much of an economic driver (to say nothing of a way out of poverty for the 800 million Chinese who live in households making less (usually far less) than 10,000 USD per year). To grow from a cheap manufacturer of basic goods to a middle income or developed economy, a transition has to take place where low cost manufacturing is substituted with value added manufacturing, innovation, and value added service provision. Japan and Korea made that transition. China? Not so much.

Yes, it can go too far, and yes, there will be winners and losers (especially workers in mature industries) from it, but there are definitely winners from our current low tariff policy. And I'd argue that the economy is better off as a result.

Oh, and the USA is a huge exporter of services, such as Consulting, Finance, etc. This really is where a lot of the higher paying jobs are and where much more value is for the American economy. That, too, can be a subject to what effectively can be called tariffs.

---


So Trump's economic policy appears to be doubling down on 150 year old technologies (Coal, Internal Combustion Engines, Steel) at the expense of innovative technologies that will grow our country at a faster rate. We're never going to be cheaper than Brazil or China or India on those things (at least I hope not - it would mean our workers would be making less than those counterparts), so I see no problem with letting them provide a greater share of those inputs at a lower price than we could make them ourselves....and....giving us heavily discounted money to buy them.

Here's the thing. You are looking at Chinese steel dumping as essentially thier government subsidizing end products in the US. Thats true. It does do that.

However, you need to ask the question---why would any government do that?

The answer is they dont see it as subsidizing your end products. They see it as BUYING your manufacturing base. It just takes awhile.

LOL. Another fun fact about mature industries. Like Steel, they're very difficult to monopolize. So China can try all they want to monopolize it.. Currently we import 2.3% of our steel imports from China. We can get t-shirts from any number of countries.

China subsidizes exports because they never figured out a way out of the dollar trap (or Euro trap) that impacts every single country that tries to manufacture their way from low income to high income. During phase 1, the poor but manufacturing country will run a trade surplus with the world. If they don't have a floating currency, they'll have to keep that surplus effectively in a foreign currency. China now has too many dollars and an economy where its so damn big that it requires them to keep exporting to the USA and Europe. They keep giving us discounted stuff because the alternative would be to destroy their economy

When people play the "China is an economic threat to the USA" card. I always like to ask them to pretend they're the head of the Bank of China and just try to do anything to the US that doesn't destroy their economy.

Its not about destroying our economy. I dont think thats their intent. Their intent is to take higher paying blue collar jobs from us and give them to their people. Like I said, their intent is to "buy" steel jobs by subsidzing their steel to the point that other capitalist producers give up. It will never be a monopoly--but it doesnt have to be for this game to work. They have become the largest steel producer in the world (831 million metric tons). Nobody else is even close. The next closest competitor is the world is the ENTIRE EU which produces 162 million metric tons. No, China doesnt have a monopoly---but its an overwhelmingly dominant position in an industry we used to be a power player in. Their strategy worked.

What does a Chinese steelworker make? Much of that steel actually is domestically used in China too. China also has massive overproduction capacity in steel. Let them choke on their overcapacity.

Again, should we be opening up our innovative technologies (which are the ones that will carry most of the growth in the future and which usually carry the highest margins) to sanctions in order to protect 150 year old technologies where the economies of scale are immense, the margins are miniscule, and the prospects for future profit is clouded? Especially in an environment where we have domestic producers, there are many international competitors, and the realistic barriers to us ramping up production aren't that extensive.

If Trump is such a jerk that we have to worry about Canada cutting off our steel...then we have bigger problems.
(This post was last modified: 03-07-2018 06:18 PM by Tom in Lazybrook.)
03-07-2018 06:15 PM
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Post: #70
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 01:13 PM)Owl 69/70/75 Wrote:  If we instituted a 15% consumption tax, our balance of trade would shift dramatically. That plus shale oil might be enough to put us into a positive trade balance. If we used the revenues from it to balance the budget, reduce income tax rates, and fund universal private health care following the Bismarck model, we would become a Mecca for world financial investment. Absolutely serious with all of that.

I totally agree...even if it was at the HR25 level of 23%. 15%..even better.
03-07-2018 08:41 PM
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Post: #71
RE: Globalist Having A Meltdown Over Steel
(03-07-2018 03:56 PM)Tom in Lazybrook Wrote:  Actually, I don't see how a consumption tax would help sell American products versus foreign ones. Unless you're setting up the consumption tax as an effective tariff. Basically, consumption would fall (as per the slope of the individual products' price demand elasticity. Consumption taxes can be highly detrimental to an economy.

So too can income taxes.

First, you've taken the concept of a consumption tax... thought of the worst possible way to implement it, completely counter to any proposal that anyone has seriously put forward or the experience of Europe.... and then used THAT as your 'default' set up.

All imported goods get a 15% tax tacked on top of the total cost
All exported goods are exempt from that tax because they aren't consumed under our taxing authority

A VAT/Consumption tax WILL be (effectively) a Tariff that counters the one that Europeans and others have. To set it up any other way makes no sense

Second, your 'could' ALSO makes no sense that we would structure it in such a way.

The PURPOSE of a VAT would be to replace (at least partially) income taxes.

If you replace corporate income taxes with an equivalent amount of VAT, then the economy is no worse off.

For personal income taxes, If you use a prefund or some sort of exemption based on 'what' (as we do sales taxes now) or 'whom' (via some mechanism in our income taxes, which would be cumbersome but is effectively no different than the person who currently makes 16k/yr, gets $300/mo in food plus free insurance and WIC and pays $2k in total taxes who gets an $8k refund... yes, it works that way for someone I know) then it is functionally no different than our current system in that you can essentially exempt or 'make whole' or 'make better off' people who earn less than some magic number, and have an increasingly progressive effective tax rate as spending increases.

People on your side of the debate often look at the marginal rate where the guy who earns or spends $1 more than the 'base' pays the same rate as the guy earning or spending millions above it.... ignoring that the (as an example) $50,000 exemption can certainly be structured so that people below that amount pay no net taxes, but could ALSO be designed so that it be a 'guaranteed minimum income' that the left wants and that paying 20% on $51,000 in spending - the $50,000 exemption is $200 on $51,000 or 0.4%.... while the guy who spends $1,000,000 - 50,000 will pay $190,000 or 19%... and records show that most of those people currently pay LESS than 19% net... despite the 39.6 MARGINAL top rate...

and that a prefund to make 'the poor' at least indifferent in spending and the focusing of taxes on the wealthy, but at a rate HIGHER, though not stiflingly so (like the 90% some Dems have suggested) than the current wouldn't possibly harm the economy more

If you (and the rest of the left) would be open to the idea that the European experience proves that there are ways to make a VAT MORE fair than our current system, and your own opinion that the left is growing in power who could ensure that it be so... whether anyone else agrees or not, then we could actually FIX some of the issues that the left laments.
(This post was last modified: 03-08-2018 12:19 AM by Hambone10.)
03-08-2018 12:18 AM
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