Couple Macro/Trade questions and a fictional labor question

Economics Economics Questions
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Hi all, I stumbled across this board when looking for information about economics, and I had a couple questions I wanted your opinons on. This is stuff I probably should’ve learned in college, but for whatever reason, am still unsure of.

I’m aware this board is dedicated to the Austrian school of thought, which is fine. I’d be interested in knowing how a mainstream economist would answer the following and how an Austrian would answer, and the explanation for the difference in thought, if one exists in these particular cases.

  1. I really liked Russell Roberts’ explanation (in his book “The Choice”) of how dollars that leave the US in the form of trade necessarily end up coming back in the form of purchased goods/services/capital/debt. However, I remember learning about a multiplier effect that a dollar spent has (when a dollar is spent on a haircut in the US, the barber then buys a meal, the kitchen owner buys a new pan, the panmaker buys a new wallet, etc). This chain of spending/stimulus that this sale creates takes place in the US, but if money is sent overseas for goods/services and/or immigrants send dollars home to their families, aren’t those dollars temporarily bounced around other countries, giving them, rather than us, the benefit of this multiplier, until the dollar eventually gets back here? I don’t recall Roberts discussing this.

  2. We know from introductory macroeconomics courses that Y = C + I + G + NX, and empirical estimates are that “C” accounts for about 70% of this in our current economy. Thus, a lot of people say something like “We’re in a recession because we’re not spending enough”. True enough that our Y goes down if C goes down, but something strikes me as odd to say “we need to spend money to make our economy stronger”. Is anything necessary about having consumption so high? Could not our economy grow and be strong and stable without us consuming so much?

  3. This one is admittedly farfetched, but I’d still like to ask. In the South Park episode “Goobacks” where immigrants from the future “took our jobs” because they would work for 25 cents an hour, the citizens of South Park were enraged. From an economic standpoint, what would the effects be? At first I see more wealth going to the employers rather than the employees because of the lower labor costs, and a simple transfer of wealth (I’m imagining a labor market with a very low and fairly flat supply of labor curve, and correspondingly, a low wage). However, with such a sharp reduction in income, wouldn’t the demand for consumer goods plummet as many things are no longer affordable? Could/Would this lead to systemwide deflation, or at least deflation in certain fields? If so, wouldn’t the wages the future immigrants get paid be more in real terms than they were previously?

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#1 you already answered the first part of your question. My take on it is that the “multiplier effect” is not AE compatible and not a theory. Also, the argument as you present it implies racism. Why should we prefer that people in one particular geographic area benefit rather than people in another area?

The main problem in the theoretical aspect is that real utility is not measured in AE. You do not just add up the benefits in one hypothetical scenario and compare the total with the total from another hypothetical scenario. I suppose the difference in thought is non-Austrians unwittingly assign values to everything and therefore reach strictly personal conclusions.