All of these statements lack proofs, analysis, theoretical foundations, or positive agreements from reliable economists; just subjective assertions gathered from dubious statistics and accompanied by a reference to Classic Economic theory. What classic economic theory?
The seriousness of the lack of knowledge and void of necessary attention to reasons for a rapidly falling economy focuses on growing segments of the U.S. public, the Libertarians and an associated Tea Party. These organizations are rapidly gaining adherents and influencing electorate positions. The Cato Institute leads the charge and its concepts, as expressed in excerpts from the following bulletin, require rebuttal.
Beyond Exports: A Better Case for Free Trade
by Daniel J. Ikenson and Scott Lincicome, January 31, 2011
Cato Free Trade Bulletin no. 43
"The case for free trade is much broader than the one that trumpets only export potential. And it is more elegant. The most principled case is a moral one: voluntary economic exchange is inherently fair, benefits both parties, and allocates scarce resources more efficiently than a system under which government dictates or limits choices. Moreover, government intervention in voluntary economic exchange on behalf of some citizens necessarily comes at the expense of others and is inherently unfair, inefficient, and subverts the rule of law."
Is it moral to move production around the world to locate the lowest labor content in order to achieve the largest profits? "Voluntary economic exchange of some citizens," or "seeking an additional few cents of profit, regardless of the detrimental effects on all citizens?" Which rule of law does the government intervention (what intervention?) subvert?
"If imports detract from growth and reduce the number of jobs in the economy, then why does import value tend to rise when the economy is expanding and adding jobs and fall when the economy is contracting and shedding jobs?"
Insinuating that imports enable growth is equivalent to saying that light enables the sun to come up. This backward look does not consider the simple; when people work, they have money to spend. Unfortunately, domestic production cannot fulfill their needs and they are forced to purchase imports. This prevents purchasing power for domestic goods, causing an economic lapse and government deficits as a rescue plan.
"Imports are vital to economic growth. U.S. producers account for the majority of imports. More than 55 percent of what Americans purchase from abroad is classified as industrial supplies or capital goods inputs used in manufacturing and other value-added activities, such as the construction and transportation industries."
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
2
1
1
