Trump is an angry billionaire with a big ego who is will acquainted with personal bankruptcy. He's not the right choice for the GOP unless the GOP wants to lose.
Seriously, is Trump here just to make Palin look sane? Because it's working. I see what you're doing there, pushing the needle so far to the right that it changes the definition of center. Nice try.
Hasn't Trump figured out that if we tax the imports of those Chinese motherfu**rs [his words, not mine] 25% that umm, maybe in addition to just raising the price of everything 25%, they'll just call our debt? Then what Trump? Do we bomb them?
Ohh, did I mention that alot of Trump empire branded goods come from China? What a hypocrite. Anything for a buck?
http://www.reuters.com/article/2011/04/29/us-trump-expletives-idUSTRE73S5PC20110429
http://abcnews.go.com/Politics/donald-trump-labels-state-made-china/story?id=13472355
PS, quit it with the moving target sideshow. You're really embarrassing yourself, the GOP, and the US. If you actually care about this country focus on real issues and real solutions.
http://content.usatoday.com/communities/theoval/post/2011/04/obamas-birth-certificate-targetstrump-birthers----and-the-media/1
Trump's history:
http://en.wikipedia.org/wiki/Donald_trump#Career
I'm not saying that Trump's a good choice, but to answer one question you asked, here is a question in return:
ReplyDeleteIf China calls our debt, and we just simply default, what are THEY going to do?
They really don't have as much power over us as you might think, unless they're willing to drop bombs over the money, either.
This is still an economy comprised of roughly 380 Million people over here, even if it is messed up, right now. We can merely trade among ourselves, if need be.
China still needs us, more than we need them, if push really comes to shove.
Dad-
ReplyDeleteMore so I guess I'm just surprised how things in the political arena are becoming uncivil. Seems like there is not much left to be sacred. I didn't necessarily agree with McCain 100%, but I don't think I would have been embarrassed if he was my president compared to some of the 2012 hopefuls.
IANAL, but I doubt we can selectively default on the debt to just China. There are a quite a few foreign nations that hold our debt, with Japan as #2 according to wikipedia. And what happens to oil imports if we default? It will be interesting to see how money is used as a weapon in the next decade. I think if imports of goods and energy into the US decline rapidly, it's going to be a bumpy ride.
There are 300+ Million Americans, but there are 6+ billion non americans, with 2 billion potential consumers in India and China alone. Sure, they have a lot of our dollars right now, but does China need the US to remain a profitable manufacturing economy?
The real question is what happens to bond rates on new debt if we default on old? There will be a blood bath as T-bills sell off, and then new T-bill sales start requiring 6%+ interest rates in order to sell. I do not think we know what happens to the percentage of GDP we spend servicing debt if we default on even one T-bill. We spend $250B a year on debt service, I can imagine that number being over a trillion if we ever defaulted. With 7% of the current budget going to service debt interest, imagine a world with 21% or even 42% of annual income just paying interest. And I am explicitly not referring to debt to GDP. They are different numbers. Most industrialized nations target total debt in the long term being 60% or less of total annual GDP, which is just a comparison for overall debt load. A lot of people use 101% as some sort of boogyman meaning we become unable to ever pay it off without pointing out that a debt of 101% of GDP is not the same as saying we need 101% of GDP to service interest on the debt.
ReplyDeleteI don't use my Google blogging account very often, so didn't catch that it was calling me Dad. (That has to do with my (now) eleven year old son's blogging extra credit assignment from a couple years back.)
ReplyDeleteAt any rate...another of my Facebook friends had said something about Trump not long ago, and I said--at that time--that I couldn't see anyone who allowed Comedy Central to roast him to be a serious candidate. (There's just too much vulgarity for vulgarity's sake on the CC Roasts.)
From that perspective, and given that Trump apparently thinks vulgarity plays with the electorate, Trump is an embarrassment to civil society...and likely is not electable.
Even so, he may well force certain issues into the open, along with serious debate.
As to China, I think the United States could do just about whatever it wanted, selectively, as there is no court which--even if it had actual jurisdiction--could enforce its judgment against the United States.
I'm not saying this is what should happen, but I am saying that I cannot see how the United States can possibly ever repay its ever growing
debt. It just seems like the logical, eventual, outcome.
As to energy, we have huge oil and gas reserves, if it becomes necessary to tap them. Radical elements may try to keep that from happening, but...desperate times will likely trump any such objections.
My comment about China needing us more than we need them, has to do with the current situation. As long as our debt isn't in default, it will be in their interests to work hard to keep us from defaulting.
If we did begin applying a twenty five percent tariff to all their goods, they might protest mightily, but I believe they would swallow hard and accept it.
While I think we have many problems besides our trade imbalances, I do believe that such imbalances cause us significant economic harm.
America, to the best of my knowledge, employs free market philosophy when trading, while many of the entities with which we have imbalances are engaging in predatory, destructive, practices.
Here's an outdated article which speaks to some of these types of issues:
http://www.epi.org/publications/entry/webfeatures_viewpoints_tradetestimony/
I'm sure the situation has only gotten worse since this was written, in 2002.
China is, from all I have read/seen, the worst offender, when it comes to destructive trade practices against the United States. (At least on a scale that matters.)
So...yes, I believe we can do without them, more than they can do without us. But, if the US ever does default on the Chinese debt, there will be a lot of upheaval and--I think--short term pain. (Whereas now, it's more of a long, drawn-out, uncertain pain.)
Just some of my thoughts...
Jay-
ReplyDeleteMy 'Dad' would have no clue where to begin with respect to even using a computer. I clicked through the link and figured out pretty quickly who 'Dad' was, I just didn't know if you were posting incognito.
After reading the article I don't have too much to add. I was going to comment on Japan's protectionism and their lost decade, but I see the author nods in the end to labor, wage and environmental standards.
Is free trade really 'free' with labor, wage and environmental regulation riders? In your opinion would the trade deficit matter less, more, or the same if these riders were met yet there was a still a large trade deficit? It seems to me the trade deficit is still the core issue; if the Chinese had pristine water, unions, and were all making what a western would consider a living wage, isn't it still the case that their continued economic survival would rely on our consumption? Or as I have previously argued, might they not find other consumers to accept their surplus? It still seems like the producer has the upper hand through all of this.
I guess reading more closely you perhaps argue against free trade. I've found myself riding in that boat many times. But what about Japan's 90s/00s economy? They didn't really 'succeed' [by standard economic definition] during their protectionist period. Do you think the core of their problem is China as well?
ReplyDeleteI think with all of it, it's going to be impossible for us to break even--let alone come out on top--if our trading partners don't have to live up to the same standards we do. (Whether talking about riders or adherence to free trade principles.)
ReplyDeleteIt's like we've been playing a board game, in which we allowed all the other players to begin the game at the halfway point.
Even though we may have been the best that ever played the game at hand, it's hard not to lose, when allowing our opponents such overwhelming advantages.
As to other markets for Chinese goods, what markets are comprised of individuals who are well off enough to fill a void which could be caused by a diminished supply of American consumers?
Poverty is still the rule, rather than the exception, in India. The last statistic I saw said that fewer than one in four homes in India had indoor toilets. (And India is a forward-leaning country.)
http://en.wikipedia.org/wiki/Poverty_in_India
America still has a lot of economic clout, even in the midst of so many dismal economic indicators.
So, it remains my opinion that we're likely to get along okay--in the long run--if we have to turn our focus inward, and trade among ourselves.
(Even then, we would still, undoubtedly, have other international trading partners.)
As to Japan's woes and solutions...I don't know. I have thoughts about where America is headed, because I'm tuned in, enough, about what's going on around here.
That said, China has tremendous resources--human, and otherwise--upon which to draw. They are, by virtue of that fact, a force with which the entire world has to contend, now that they've begun marshalling those resources effectively.
Under Mao, they were an economic joke. That's no longer the case.
Jay-
ReplyDeleteNo doubt the definition of poverty in India is -far- different than poverty in the US. I think it all comes back to the numbers. Combining the population of India and China, they are [I think] about 6 times larger than the US population wise. While they are still a -long- ways away, as a -percentage- they simply don't need to bring as many people out of desperate poverty to have an economic population equivalent to ours. The same goes for education.
How much higher are the price of goods manufactured in China to the western consumer because of a western owner that expects western level profits to report to the western stock exchange? For example, there is a specific set of components that we purchase directly from a Chinese manufacturer. The component is an optical laser for communications that can be expensive per unit depending on the specifications ordered, at times on the order of $2000/per when sourced from the Chinese manufacturer --directly--. The American markup can be at times 4 to 8 times the cost on this product depending on who you source the component from. The American companies aren't making these products on American soil, they are importing from Chinese manufacturers as well.
Are the manufacturer we purchasing from stealing IP and running a fourth shift operation? We many never know. What I do know is that we could not afford to offer a high bandwidth network offering to education without using this tool to lower costs.
So couldn't the consumption levels of places like India and China rise much quicker if Western pricing models were cut out from manufacturing, distribution and ownership?
As you argued internal trade could offer a 'reset' button but we have a large manufacturing base to reconstruct if we are forced to go this route.
-Michael
You said: "...but we have a large manufacturing base to reconstruct if we are forced to go this route." (Regarding a "reset".)
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Sounds like jobs, to me. We have the tech. The Chinese aren't using tech they invented. They're using OUR tech, for the most part.
Again...I am not saying that I want to see things shake out this way. I am saying I don't see how it shakes out otherwise, and that I think that our recovery period would not necessarily be incredibly long.
Truth is, none of us know. We, reputedly, have many of the best minds on the planet, and have had for many, many years.
Yet, look where we are now. Look what a mess all of these very smart people have gradually created for us.
Or, so it seems to me.
I do understand your point about the sheer numbers available in these other countries, but poverty does not magically disappear, and you don't overbuild product and hope that a market will appear. (And you can't jump from a subsistence life, to buying non-essentials, overnight, either.)
It can be fun to muse about this stuff, though. (And maybe therapeutic too, huh?)