The U.S. and the Current Free Trade ProblemsEssay Preview: The U.S. and the Current Free Trade ProblemsReport this essayThe U.S. and the current free trade problems.The United States economy is very vast and plays a large part in the worlds economy. Currently the way countries determine how well they are doing in this grand stage is by calculating there gdp and trade surplus or defects. Two of the five parts of our countrys Gross domestic product (gdp) is exports and imports. We subtract our imports from our exports and we come up with either a positive number our negative depending on how much we import in. We always have a negative number with in the past 30 years now because we import in more than we export which can be a real problems. These problems range from currency manipulation, entering into trade agreements that are lopsided to begin with and labor rules and regulations.
The chart can be downloaded by drag and drop to the left.
This chart can also be clicked on to display a link to an in-depth analysis of this issue.
As we mentioned in a recent post , we are now seeing some major problems in the U.S. economy with the import competition that is leading to a significant loss of jobs. There are even reports of people suffering losses from these regulations.
But just as there are times and places where people lose a Job even if they are able to find work they are going to lose it because the regulations and labor laws allow them to.
As with anything else in this field it is easy to believe that it is simply “because the regulations are bad to the point they are useless” but it must be added that it is no different here. For example, there is an inapplicable restriction on the amount we can buy food and a inapplicable provision for paying overtime, which is something that I can relate to, but that is very clearly not what my home state of Ohio does.
And there are those who want to argue that the regulations should be abolished. I have written before and you can see my view through some interesting analysis and it is one that illustrates once again that these regulations are simply not effective. In order to argue that they are not effective you first must first be able to explain the government’s stance and why it is not working the way it does right now.
There have been a few arguments made on the right side which have led to a very large amount of “correct” government policies. There are many.
There are two main objections to our existing regulations:
1. This isn’t what government actually does. The idea of something as absurd as the regulation is so absurd and overzealous that it is absurd on its face to say it is. That is what the current proposal by the U.S. Government is. It is an unreasonable cap on exports.
2. It fails to address the most pressing issues in our society. While the actual regulations are ridiculous they fail in some fundamental respects. We have to make sure we are making the right decisions but not the same ones which are making the wrong decisions. There is also a very strong argument in favor of raising the minimum wage. We see this as a way to incentivize people to invest in other important areas through higher income tax rates and the like and also because it is not a matter of what the minimum wage will do. It is far better for people to spend their hard earned money than to invest their time and resources in anything that creates job growth for the economy of their living conditions.
There are also various questions that have arisen in both directions. A number have been raised and answered by opponents. Among them is just how much and what is the real cost for not being able to keep jobs we have created. They point to research that shows that we need an additional $10 a day for people to have full access to affordable healthcare or have access to public services, which is quite low because people already have to go through federal bureaucracy. And others contend that it is a cost that we have to pay. A lot of it is also because everyone in this country is living paycheck to paycheck, they could very well start living paycheck to paycheck and the burden is always on employers and employees. Therefore, that is no good. On the other hand is there any real harm that the current system
The chart can be downloaded by drag and drop to the left.
This chart can also be clicked on to display a link to an in-depth analysis of this issue.
As we mentioned in a recent post , we are now seeing some major problems in the U.S. economy with the import competition that is leading to a significant loss of jobs. There are even reports of people suffering losses from these regulations.
But just as there are times and places where people lose a Job even if they are able to find work they are going to lose it because the regulations and labor laws allow them to.
As with anything else in this field it is easy to believe that it is simply “because the regulations are bad to the point they are useless” but it must be added that it is no different here. For example, there is an inapplicable restriction on the amount we can buy food and a inapplicable provision for paying overtime, which is something that I can relate to, but that is very clearly not what my home state of Ohio does.
And there are those who want to argue that the regulations should be abolished. I have written before and you can see my view through some interesting analysis and it is one that illustrates once again that these regulations are simply not effective. In order to argue that they are not effective you first must first be able to explain the government’s stance and why it is not working the way it does right now.
There have been a few arguments made on the right side which have led to a very large amount of “correct” government policies. There are many.
There are two main objections to our existing regulations:
1. This isn’t what government actually does. The idea of something as absurd as the regulation is so absurd and overzealous that it is absurd on its face to say it is. That is what the current proposal by the U.S. Government is. It is an unreasonable cap on exports.
2. It fails to address the most pressing issues in our society. While the actual regulations are ridiculous they fail in some fundamental respects. We have to make sure we are making the right decisions but not the same ones which are making the wrong decisions. There is also a very strong argument in favor of raising the minimum wage. We see this as a way to incentivize people to invest in other important areas through higher income tax rates and the like and also because it is not a matter of what the minimum wage will do. It is far better for people to spend their hard earned money than to invest their time and resources in anything that creates job growth for the economy of their living conditions.
There are also various questions that have arisen in both directions. A number have been raised and answered by opponents. Among them is just how much and what is the real cost for not being able to keep jobs we have created. They point to research that shows that we need an additional $10 a day for people to have full access to affordable healthcare or have access to public services, which is quite low because people already have to go through federal bureaucracy. And others contend that it is a cost that we have to pay. A lot of it is also because everyone in this country is living paycheck to paycheck, they could very well start living paycheck to paycheck and the burden is always on employers and employees. Therefore, that is no good. On the other hand is there any real harm that the current system
Just recently some new changes in our countries trade agreement were passed. These new agreements were aimed at developing free trade with Colombia, South Korea and panama. In which would greatly increase our exports to these countries and here by increasing our gdp and jobs in the U.S. economy. But on the other side of the problem is the United States already has trade deficits with South Korea and Columbia. This would mean when the agreement starts we would never get out of that deficit and also would have a more imports coming into the U.S. as well as some job loss as well. “Rapid import growth and the existence of trade deficits before trade agreements take effect combine to ensure that trade deficits continue to grow when the trade agreements were concluded. Because exports were less than imports in the base year, then the trade deficit tends to expand if imports and exports both grow at the same rate. These deficits tend to persist and grow following implementation of trade agreements with the United States, as illustrated by
The cases of Mexico and China. The only way to eliminate trade deficits with these countries is for the rate of growth of exports to these countries to accelerate, while import growth rates fall. That has not been the case for the most important U.S. trade agreements, especially with low- and middle-income developing countries such as China and Mexico.” (t, 2010) With this in mind, we need to look at how to solve the problem in the first place. “First, we should stop making things worse. The rule when you find yourself in a hole is to stop digging. Today, the Obama administration is still promoting more of the same trade agreements that have consistently failed in the past. We are told that free trade agreements with countries like Colombia and Korea will increase exports. Thats probably true. But as we have learned over the last 30 years, they will increase imports more. The net result will be to destroy U.S. jobs and add to our global debts.” (Faux, 2010)
” (t, 2010) A second, smaller set of problems are facing the Chinese and Mexicans. These countries are making more money, as they invest more in their manufacturing industry, which also contributes to a slowing of GDP growth. We should stop making things worse, and focus instead on how we can help China and Mexico by improving the quality of their education, infrastructure, and education system. While Mexico’s education system is a major source of economic growth in its own right, there are a tremendous number of poor people who do not even receive a college degree. And while the benefits to American middle class Americans of an increased American education go beyond student loan debt, there is nothing for low- and middle-income Americans to complain about.‣The other problem is with the tax code. The United States spends a tremendous amount of money on tax, but it then imposes many of the burdens on many others. The “gig tax” that Americans spend to pay for tax will be $500 billion, but that is too low. There will be other “gig tax” plans that will increase taxes on more people than they do tax at the general level, to cover even the higher cost of living. We don’t know how to deal with this dilemma better than we already do. “Second, while we would like to move away from cutting federal, state, and local tax rates for every dollar of income, we need to get rid of it. We owe some Americans a great deal and one of the most unjust consequences of our tax system. We don’t have any other way of doing this. But the other way is to try to repeal and replace Obamacare at the same time. “Third, we can’t save the American working families that have suffered under the failed system. This is not some small movement that will succeed in doing great things, but it will not improve America’s future.† We need to look beyond the Obama Administration. It is our job to rebuild our economy and to fix our broken criminal justice system and to secure our national parks and monuments (which still deserve to be protected by the federal government for all to see). But we have to also recognize that one of our greatest American strengths is that we are not bound by the law and that there have been many mistakes that have led to our dysfunctional system. All we can do is use our strength to stand up for the law and stop these broken and unfair government practices we have been exposed to. ‡Fourth, we have no problem with allowing an expanded media. People of all backgrounds and religions are eager to see something that matters to them. But this is largely about making sure their stories are seen because of their contributions. We need access to the best talent and tools to tackle these problems by promoting open and honest media.‣ Fifth, we must continue to encourage more independent foreign media because it does not lead to a higher standard of living in our country. The United States is still struggling politically and economically because of the way its media operates. However, our political system is based on honesty, respect for elders and for open, honest communication. The United States is not the only country in the world willing to allow independent media to serve its interest, but we must also continue to encourage other nations to be supportive of independent media operations and independent media entrepreneurs.… Sixth, we need to increase our efforts in education, health, and the arts. It is hard to find an institution that does not give us a greater opportunity to succeed. We can do better with education even more than with health and health care. When the United States is confronted by economic stagnation, we need to have the tools to create opportunities beyond our current funding
Another dilemma the United States has to deal with is the manipulation of foreign currency. A couple of countries like to keep their currency artificially low so they can be able to increase their exports to foreign countries, china is the most abusive of this practice and south