Real Policies for a Sustained Economic Recovery
For reasons that we have mentioned many times in this space, we believe the Obama administration’s policies to recover from this depression (technically, a recession) have been practically worthless, notwithstanding their enormous cost. The administration’s economists, who should know better, have endorsed the economic stimulus plan notwithstanding the fact that it throws money at a variety of programs that provide no sustainable stimulus to the private sector. Oh, the rebates, the klunkers’ program, subsidies for energy spending give temporary stimuli but nothing sustainable. To achieve sustainable economic growth, investment in manufacturing and industry is required. Stimuli to alternative sources of energy, principally wind, solar, and biochemical will not produce sustainable growth until we begin to run out of petroleum and natural gas which is likely to be delayed three to six decades.
All the while, there were cost-free and revenue-producing measures that could have been taken to stimulate private investment. In a posting on this site on June 28, 2010 entitled “ Bush and Obama's Economic Stimulus Attempts”, we criticized the administration’s policies as well as Republican proposals and promised to put forth our own proposals for a speedy recovery. Our first proposal is to end our foreign trade deficits which have caused the closing of thousands of American factories and the loss of millions of good-paying industrial jobs. We need to stop the outsourcing of the production of goods that Americans consume and produce the products of American ingenuity here.
Bringing trade into balance will not cost a trillion dollars like Obama’s failed economic stimulus program but will in fact increase government revenues by many billions of dollars. We need to begin immediately the process of getting our millions of unemployed quickly back to work in good jobs and we can do so by imposing a tariff on imports from those countries that have been abusing our open markets by artificially imposing barriers to imports from the U.S. They are easily identified by the fact that the U.S. has been experiencing chronic trade deficits year after year with them. China, Japan, and Germany are among them.
We are not proposing tariffs on selected products as the Smoot-Hawley Tariff that took effect in 1932 did. The tariff we recommend is a single rate applicable to all imports from the targeted country. The tariff rate would depend on the size of our trade deficit with that country. Moreover, all a country would have to do to get the tariff reduced or eliminated is to increase their imports from us, something they could easily do simply by removing their artificial barriers on imports from us.
http://www.idealtaxes.com/post3177.shtml