Readers write: Trade solutions, US economy
Letters to the editor for the Oct. 10, 2016 weekly magazine.
Regarding the Aug. 8 cover story, “The truth about US manufacturing”: The United States has a $500 billion annual trade deficit primarily because of the loss of manufacturing. Every dollar spent in manufacturing generates an additional $1.08 of business. Thus the loss of manufacturing jobs has an oversized effect on total jobs.
If we had balanced trade deals, we would have avoided the 20 percent drop in wages for those without a high school education, the 10 percent drop in wages for those with a high school education, and flatline wages for those without a college education. The Clinton, Bush, and Obama administration trade deals were made for the benefit of parts of the business community and the well-to-do and to reach foreign-policy goals by which we paid off countries for other favors by giving them US jobs.
There are three solutions: tariffs, renegotiating trade deals, and certificates. Tariffs have rewarded those with friends in Congress, which decides what industries to favor, while trade deals are driven by short-term foreign-policy objectives. Trade certificates are an ideal proposed by Warren Buffett; each exporter gets a certificate for each dollar of export. Importers have to buy certificates from exporters where there will be a high price for certificates if there is a large trade deficit. It’s a free market strategy to force a balance in trade.
Regarding the June 21 blog post that ran on CSMonitor.com, “Will US productivity stagnate or flourish? Maybe neither.”: The article states that “US productivity performance has been utterly dismal ... [in] an eight-year rut.” The US economy is building a permanent state of stagnation by adding entitlements from debt instead of taxes. Immigrants are coming to the United States for entitlement instead of jobs. To build a sustained economic recovery, we need to control our debt and secure our borders.