Tariff - Growth Paradox 1

The millions spent on this inaugural ceremony would have been better spent on jobs and the economy. The opulence seems obscene when we have such destitution of the poor and exhaustion in the middle class. The style does not promote the needed energy, the leadership nor does it recognize the reality we now face.

Facts: Debt was 14.747t at the end of 2012; 16.027t last Friday, a 2.28t increase. The trade deficit for 2012 was 560b, 21% of our imports! That trade deficit is equal to 24.56% of the budgetary over-run. The IRS generated 2.179t in revenue last year (as above 2.28t short of spending, largely a result of Afghanistan, Iraq, the banking crisis and natural disasters.) China accounts for a 58% trade deficit; Japan 32%, Germany 42% and so forth.

As of last Friday, Jan 19^th, the treasure took in 3.2b for the day, 122.8b for the month and 699b year to date (fiscal year began Oct 1^st)  The year over change from this time last year amounted to plus 10.2% month to date and plus 10.4% year to date.
I do not see why, given the sever nature of our economic stagnation that we do not initiate a “Buy America, Build America, hire America” campaign the likes of which the world has never seen.

Additionally, we might start with (1) emergency tariffs just equal tho the preceding month’s deficit with the respective trading partner, down to a manageable level of say 10%.[1] (2) Void toxic and illegal mortgages on all foreclosed homes, thus placing the hurt on the holder of bad paper and giving the uprooted families a bonanza from which they can grow. (3) Tax hedge funds, credit default swaps and shadow investing activity; that alone would paydown the debt. (4) Drop corporate tax to 10% across the board (corp. tax makes up about 12% of total revenue and it is double what competing economies collect). (5) Tax the hell out of estates in excess of the marital exclusion. No country has ever survived with the concentration of wealth in the hands of so few. (6) Remove all taxation from companies with factories abroad so they can bring their profits home. (7) Eliminate tax loopholes. (8) Provide college or trade school tuition to all unemployed after their coverage runs out. (9) Build modern rail transportation, high-speed highways with electric grids. (10) Stop all emigration in its tracks. (11) Require all young unemployed youth, under 21, to be in school, no exceptions, no truancy. (12) Put some silver back in the coinage, like spiking the mine. (13) Most importantly mandate total energy independence, no more oil imports from anybody. (14) Yea global warming too, but we have to get it together first. Growth and technology can take us there, but it probably cannot cure the rest of the world and its hunger.

So there you have it, crazy but why not. It would all have to be by emergency executive order. Congers can say no after it happens. Once we taste prosperity, there is no turning back. We belong on an 8% growth curve not China and Brazil. The world has been growing on our back. It is time for a breather and internal growth. We can only be a World leader if we have our own house in order. We are doing way too little way too late!

The reference below says in some detail that eliminating tariffs did not always result in economic growth. The glories of unrestricted global trade seem suspiciously overstated. The resulting trade imbalance and outsourced cheap forign labor may in fact contribute to the exhaustion of the middle class and the unprecedented concentration of wealth in the richest few.

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[1] A Tariff-Growth Paradox? Protections Impact the World Around 1875-1997 Michael A Clemens & Jeffrey G Williamson, working paper 8459 NBER