Invoices became wrong

Economic nationalismIt was done correctly, it could work very well for the United States in the coming decades. The most glorious period for US companies, before 1913, was a time of high invoices and controlled immigration. But, it was also a time when there was no income tax. And, at this time of pre-federal stocks, money was fixed in gold. The result was very good. The United States, initially a very promising “emerging market”, ended up in a global superpower.

Today’s era of the globalization system is dated to the 1944 Bretton Woods Agreement, it broadcast milestones such as the 1994 North America Free Trade Agreement, but has reached its full expression with China’s inclusion in the World Trade Organization in 2001. that he benefited from American citizens. Many industries have “rolled out”, with unemployment, underemployment and depressive salaries the first consequence. A weak domestic economy did nothing to get the loose. The supply chain dependence proved to be incompatible with a tendency towards a more “multipolar” world, where China or Russia’s developing regional power combined with US exhaustion with its role after World War II as a worldwide police officer.

Within this context, some economic nationalists (such as Pat Buchanan) supported a tariff invoice of flat interest rates, avoiding the aggravating complexity of different rates for different products from different countries. It is essentially an equivalent equivalent of a retail tax on flat interest rates and can range from 10% to 20%. It may add to some country-related invoices, depending on the situation, perhaps 5%-20%. For some reason, we believe that free trade with Canada or Germany is much less problematic than free trade with China or Mexico. Why is this? There are many answers to this question, most of which are good answers, which show that general economic authorities are supposed to be helpful for all seasons and all parties. These things happen in a historical and geographical context.

Invoices are taxes. And all taxes tend to have negative economic consequences. Part of the 19th -century 19th -century strategy was also the superlative domestic economic policy, combining low taxes with a very friendly regulatory framework. Trump’s administration was talking about eliminating capital profits tax, which economists of the 1980s bid claimed it was the most economically harmful tax, compared to its average revenue. Taxing the tax would be a certain money officer – the financial health that followed would result in higher revenue than all other taxes. Unfortunately, this logical attempt to balance the higher tariffs with lower domestic taxes has faced problems, both with the difficulty of continuing the lower tax rates entered into the 2017 tax cuts and jobs law and some tips for higher taxes. Higher invoices and higher domestic taxes in combination will not lead to a healthier economy. Also, it will not lead to more tax revenue.

Unfortunately, Trump’s administration, in its policy, has embraced a framework that is basically misleading and sure to lead to a devastating policy that does not benefit anyone, including Americans. Expressed in a recent Stephen Miran document called ”Use Guide to restructure the global trading system. “Miran was later appointed as the Chairman of the Council of Financial Advisors. This document focuses on “commercial imbalances” (basic current account deficits), which are supposed to be restored by invoices and also changes in foreign exchange rates. But, do we put too much blame on Miran, This thought line returns at least in the 1950sand historically much earlier, in Era of the eighteenth century. Variations are found in common financial manuals today.

I will reject it entirely. It is tempting, in some people, to find such a widely exhausted body of pre -existing economic doctrine that seems to support a nationalist agenda that has greatly reached the real experience. But most of his claims are false. The whole idea that “commercial imbalances” must be resolved by changes in exchange rates is strange. The fact is that the various states of the United States or the various eurozone countries also have “commercial imbalances” with each other, even when sharing the same currency! This comes from the basic fact that there are no “commercial imbalances”. All trade is always balanced.

The primary reason for “commercial imbalances” (US current transactions deficits) is the low rate of capital. US saving rate is low. Almost all of these savings in recent years have been exhausted for funding funding, leaving almost nothing for clean domestic investment. This has led to dependence on foreign capital, even for today’s low levels of domestic investment, which are statistically appearing as a positive financial account and a negative current account or “commercial imbalance”. The solution is a higher percentage of domestic capital creation (capital tax exemption will help), in combination with smaller federal deficits. Let us note here that this solution, absolutely logical as it is, is also completely opposed to post -war Keynesian doctrine, which says that the recession or lower economies are caused by excessive savings. And that most expenses and the biggest federal deficits are the answer. The post -war Keynesian doctrine should be followed by the post -war Mercantilist Dogma on the pile of history.

During the high 19th century, the value of the dollar was constant constant in gold. Although the US too ran a running account deficit throughout the nineteenth century (Basically because of the European capital that flows to the point where it was best treated), this was never a problem and no one tried to solve this non -existent problem with currencies. The result was that the US became an economic superpower.

However, if the US dollar is “strong”, but other coins are weak and reduced value, resulting changes to foreign exchange rates will introduce serious issues abroad. That is why economist Robert Mundell claimed that free trade and floating exchange rates are inherently incompatible – an excuse for the creation of the eurozone. Probably that would be Good condition to use this particular flat enforcement invoice reported earlierwhich would provide some pillows against the impact of the currency. But I would abandon all the allegations that various countries are “coins” – a claim that even includes those countries that determine their coins on the dollar!

Already, the most practical members of Trump’s administration have come to the conclusion that the recent tariff strategy is causing more harm than good, even to Americans. The entire framework of “defining commercial imbalances” through invoices and foreign exchange (detailed on Stephen Miran’s paper) should be abandoned immediately. There is still a place for a policy of economic nationalism that could include significant invoices. These are better as flat enforcement invoices. For good results, such as strategy should be combined with good domestic policy, including low taxes and fixed money – or what I have called “the magic formula. “He worked for the United States in the nineteenth century and could work again today.