THE ECONOMIC FUTURE OF THE USA

Economics Economics Questions
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21

Dear Smiling Dave:

I have really enjoyed your comments, and I will enjoy discussing them with you.

After the American revolution, the USA instituted extremely high import tariffs to encourage the industrialization of the USA, and it was successful in establishing a positive balance of trade, accumulating Gold reserves, creating a manufacturing base with industrial jobs, creating a technical data base, and making the USA independent from England for technology.

My knowledge of economic history is really weak, any one have some info on this fantastic success of the mercantilism? Read the Federalist Paper #42.

We must create a positive balance of trade by any means possible.

Maybe US citizens have already thrown out the baby with the bath when the USA de-industrialized and destroyed our ability to generate wealth via manufacturing products for foreign trade.

I agree that high import tariffs would end trade, but this would stop the flow of wealth and title to US assets to foreign nations. This will give the USA a chance to save the assets that are left and use these assets to finance re-industrialization.

Negative Foreign Trade Balance and Deficit Government Spending will destroy the purchasing power of the US dollar. I also agree that this is a great problem, because US citizens want free government payments such as Social Security, Medicare, Medicaid, welfare, unemployment, etc. with borrowed money from industrial nations. Cutting of government spending will cause people to object.

Without import tariffs, most all products will continue to be available for less US dollars if they are manufactured in foreign countries where labor and environmental costs are less, than if they arte made in the USA. We need to reverse the Negative Foreign Trade Balance, or the purchasing value of the US dollar will soon go to nothing and then the US economy will self destruct.

The US labor force has no future without high import tariffs to prohibit foreign imported products. You and I disagree. I believe that US citizens will live the lifestyle of peasants in Asia if they have to reduce their pay expectations to meet the wage rates paid in Asian factories.

You make it sound like something bad, smile. But seriously, say they revolt. Now what? The basic economic q’s still have to be addressed.

The US citizen might have no option except to revolt and overthrow the US government. I believe that this would be a bad thing.

If any future US revolution to overthrow the US government occurs (maybe to change the economic situation), food, fuel, water, sanitation, medicine, and other necessities to support the population will not exist after the revolutionary hostilities start. Chaos and total lawlessness will prevail during and long after any US revolution.

Only the very meanest and the most evil will survive in this climate. We will have then totally destroyed our civilization. US Citizens will have to comply with the will of any and every armed person that we encounter.

Will all of the city residents starve after a revolution? Most of the US urban population is not knowledgeable enough to live off of the land anymore. The city dwellers might foray into the country, kill the farmers, and steal the farmer’s food to feed their own families. Food might become more valuable than freshly printed paper US dollars.

If any future US revolution to overthrow the US government is successful and occurs for some reason, will foreigners hire the unemployed US military (and maybe various city policemen) to keep the US population under control, or to regain control, and/or to re-establish law & order after an economic collapse and the resultant civil unrest?

After the US economy is totally and completely destroyed by both political parties and when the vast majority are unemployed with no prospects for future employment, and when the citizens have no confidence in the government, the US citizens might listen to a charismatic politician who will promise the nation into a new government (German Reich) that will correct all of the real and imagined injustices that are hurting the citizens in return for absolute political power and suspension of the US Constitution.

I totally agree. That’s why they will have to think up something else to do. As Gerald Celkente says, you can’t compete with slave labor. He suggests [gasp] making HIGH QUALITY products [like the USA did in the old days[.

BTW, after WW2, USA workers were paid higher wages than anybody else, the quality of the work was the best, and our stuff was THE CHEAPEST. And we were a creditor nation. So it can be done. Of course that was in the days of minimal government interference.

Without high import tariffs, US workers must compete with foreign workers at or below foreign wage scales for employment in the USA. Most USA citizens do not want to work for wages that the same job in a foreign country would pay.

Instead of re-industrializing to make the things that we consume, maybe the USA might be able to re-create the world class leading Science and Engineering technical population that existed during and for a few decades after WWII when the USA was the leading source of advanced technology, manufacturing, jobs, and industry for the entire world. This technology caused foreign trade surpluses for decades until “free trade” government policies were established a few decades ago, and became destructive to our economy about 1980.

Asian countries are now outdistancing the USA in producing very large numbers of competent scientists and engineers that might be even more creative and more competitive than the US educated scientists and engineers. China, India, Brazil, Pakistan, and other industrial foreign nations are producing large numbers of scientific graduates because their technical education process starts early and continues through university levels to produce a large number of very technically qualified young technical graduates, while the USA produces large numbers of MBAs and very few Technical Science and Engineering graduates.

There is very little economic incentive for US citizen college students to major in any of the science or engineering fields at this time. This needs to change for the benefit of the US economy. I believe that most students today want to study business and/or economics in order to become one of the wealthy Wall Street (master criminal) business tycoons. No person in his or her right mind would major in science or engineering since the pay scale has eroded so much in the last few decades and the study is so demanding compared to several other less demanding and more rewarding fields of study.

We must also eliminate our federal government borrowing to pay expenses, because it will destroy the US Economy.

That’s like saying about a dying patient “Until he gets better we cannot afford to let him breathe oxygen. Strict carbon monoxide diet for him.”

Until the USA can re-industrialize and correct our foreign trade deficit, and eliminate our federal government borrowing to pay for government expenses, maybe we cannot afford to have free trade

“because it will continue to destroy the US economy if we do not.”

The USA population will then become employees; possibly indentured servants; or maybe even beg to become slaves owned by the foreign entities and/or foreign individuals that will acquire everything of value in the USA, including the businesses, factories and other places of employment, in the very near future if the US government continues to destroy the US economy.

US citizens might have no options if they want to feed their families? Our children and our grandchildren might also have to change to the religion (probably not Christian) of the business owner if they want a job.

No. It’s the cure.

Gerald agrees, high import tariffs to prohibit foreign imported products is not the cure, but it will slow down the destruction of the US economy until the USA can structurally change the US economy.

After thoughts to myself:

“OK Dave, you know the party line. You have seen that the concept of comparative advantage is as old as the hills, and have read that it refutes decisively “the tariff to protect us” nonsense. But do you have a link? Can you sum up the argument?”

“No,” I reply. "But I do think I get the bottom line. Which is, how can making everything more expensive for everyone possibly be good for everyone?" It might prevent a second US revolution.

“But the workers will starve. They can’t live on a dime a day, like they do in China.” The workers might start a second US revolution.

“Yes, times will be hard. Wages will be low for everyone. Of course, prices will be low for everyone, too.” The workers might start a second US revolution if it takes one weeks wages to buy a loaf of bread.

"OK then. Obviously it’s better to have a tariff, so that wages will be high for only a very few people, and prices high for everyone. That might be better than a second US revolution.

OH, I do have a link.

http://jim.com/econ/

I really like what Henry Hazlitt is saying. He makes much more sense than my economics professor at my college. (I am a Mechanical Engineer).

Chapter 11 seems most directly related." Or maybe chapter 13, except under what jurisdiction?

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The US dollar has value because people speculate they can buy american wealth with it, not gold, but other goods and services from America. Once foreigners realize there isn’t much here to buy worthwhile our currency will truly plum-it in value. However that said, it hasn’t been shown yet that this is the case.

A unit of exchange’s value isn’t valuable because it is gold, or silver, or any other commodity. It’s value is judged by it’s exchange ratio of vendible goods. People speculate that a unit of exchange will most likely satisfy whatever future demands they may have.

There is nothing immediately wrong with doing business’s with foreign vendors. The trade by itself will be balanced if left alone.

So you’ve simply outlined a problem with our monetary system. That does eventually need to get corrected, either via market crash or the removal of the current fiat system.

We cannot force any type of trade balance. Balance will occur naturally when we get our hands out of it and let the market mechanically function on it’s own. In unhampered, un-coerced, exchange there can be no deficits. Both parties get what they want, and give up something they wanted less.

So if you want to eliminate our terrible trade deficit, eliminate our terrible monetary system and remove all forms of government intervention(Protectionism), like tarriffs, volume quota’s ect…

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My Sherlockian powers deduce from that line and from all your posts:

  1. You are a smart person with an open mind.

  2. You have been fed silly pseudo economics in college.

  3. You haven’t read Hazlitt yet.

Summing up, we seem to agree on alot. That there is a real problem that needs to be addressed. That tariffs are far from ideal.

Where we diverge is that you are saying that tariffs are a stop gap to prevent something worse.

For a lil while, you seem to be saying, lets have tariffs so that the vast majority of the US workers will keep their jobs.

But what I don’t get is: out of whose pocket is the higher salary for these guys gonna come? Will the Chinese pay these US workers the higher salaries that tariffs are supporting? No they will not. Will the govt? We have agreed that the govt should spend less, not more. Will it be the higher prices of the goods that pay the higher salaries? Probably, right? No where else to get the money from.

So the real answer is: You, me and everyone in the whole US of A is gonna shell out to keep a couple of people wealthier. Why do they deserve my money more than me? How will the economy as a whole benefit by them having my money instead of me having it?

Or do you think tariffs will give EVERYONE a job? That everyone will benefit by having prices absurdly high? Then who pays for everyone’s higher salary? If everyone has a higher salary, that’s called inflation, right?

Just as you are against govt spending, which is just robbing people of their money to give a tiny segment of the population, so you should be against tariffs, for the exact same reason.

By the way, I think I’ve seen that the Federalist papers are unreliable propaganda. Like I say, it’s one of my many weak points, history.

General Motors and the whole Rust Belt in the USA is a very good lesson of what happens when people get paid more than they deserve [meaning what a free market will set] because of laws to protect them. They bankrupt the companies that hire them.

As for the riots that will be averted if we overpay the workers, what about the riots from the consumers, who are a much larger population? Especially when they know damn well that the cheap stuff is right there in China waiting for them.

“They won’t riot just because they pay a lil extra.” LOL. If the problem is so tiny, then the people who would lose their jobs by free trade must be miniscule, too. If there are so many workers, enough to overthrow the govt, then they need to take a huge chunk out of everyones wallet to be supported, right?

Bottom line, read the Hazlitt book cover to cover, it’s a real revelation. Then you can search around this site’s excellent resources for more expert wisdom and info than I have on the issues you raise.

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I second the reading of Hazlitt’s book. You will enjoy it so much and will be so far ahead of everyone else for doing so. Your mindset is already in the right place. Keep going with it!

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Dear filc:

Thank you for your comments. I will try to address them as follows:

Gerald Spencer: The US dollar has value only because it can be redeemed for title to US located assets that were created by previous generations of US citizens instead of gold from Ft. Knox.

filoc: The US dollar has value because people speculate they can buy american wealth with it, not gold, but other goods and services from America. Once foreigners realize there isn’t much here to buy worthwhile our currency will truly plum-it in value. However that said, it hasn’t been shown yet that this is the case.

filoc: A unit of exchange’s value isn’t valuable because it is gold, or silver, or any other commodity. It’s value is judged by it’s exchange ratio of vendible goods. People speculate that a unit of exchange will most likely satisfy whatever future demands they may have.

Gerald Spencer**:** Most currencies of the world are redeemable and backed with gold. Any paper money could be a reciept that is redeemable for for grain, oil, sugar, coal, wood, or any other commodity that is securely located. This means that the paper money can be exchanged for that commodity at any time upon demand. This paper money becomes valuable and easily exchanged for other things of value such as property, grain, machinery, etc., or deposited in a bank, or exchanced for another currency, maybe one backed by gold that is more universally acceptable, more durable and more portable than grain, oil, sugar, coal, wood, or any other commodity. The US dollar is exchangable for goods and service from the USA but the prices of our goods and service are more expensive for foreigners to purchase than goods and service produces in other countries.

If we had lower cost labor to manufacture products at a lower cost than other foreigners, then foreigners would spend their currency to obtain our products.

If we had better technology to invent new products, then the foreigners would spend their currency to obtain our products.

We need to reverse course of our educational system and re-emphasize science and engineering to create more and better trained medical doctors, engineers, and scientists as the US educational system did prior to the 1970’s. The USA must produce medical doctors, engineers, and scientists that are much better educated, much more intelligent, and otherwise superior to any foreign educated engineer and/or scientist in order to design, create, innovate, and produce new technical products that foreigners do not have, so that the foreigners will then buy these new products from the USA, in exchange for their foreign gold and US currency which could then be sent to the USA companies.

Our computer programming technology and expertise (ala Microsoft etc.) helped our balance of payments considerably in the past, but the lack of technical education in this country today has been reduced and will soon totally destroy this export capability. The foreign countries have become better than the USA at creating new computer software programs, since the USA has chosen to de-emphasize technical and scientific education in our universities. Asian Countries are now the producers of new computer technology, not the USA.

Visit the Texas Medical Center (mostly the MD Anderson Cancer Center in Houston) and witness the percentage of women wearing Burkas to get a clue or to estimate the percentage of foreign medical service income currency that is received at the Texas Medical Center. I do not believe that any of these women wearing these Burkas are US citizens. Foreign currency paid to our US located Medical Doctors, Laboratories and Hospitals by foreigners improves our foreign trade balance. I think that most foreigners still believe that US educated medical doctors are much superior to their own in-country educated medical doctors, and that is the reason that they seek the best medical care available which is in the USA. We must maintain the US leadership in the medical field.

Engineers who are working in Foreign Countries and sending (most of) their dollars home to the USA improves our balance of trade. In the past, foreigners believed that US educated and trained Engineers were superior to their in-country educated Engineers. This advantage has almost disappeared since the USA stopped emphasizing engineering education, science education, and other technical education in our Universities. I have been the engineer of record for the construction of projects in Asia, Europe, Middle East, Caribbean, and South America.

US citizens are unaware of the lifestyle advantage that we are accustomed to and take for granted. If our economy collapses, I believe that we can become a starving third world country overnight.

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Dear filc:

Again, thank you for your comments. I will try to address them as follows:

Gerald Spencer: This causes a continuous flow of US dollars to foreign businesses in industrialized nations.

filoc: There is nothing immediately wrong with doing business’s with foreign vendors. The trade by itself will be balanced if left alone.

Gerald Spencer: There is a limit to the amount of dollar value of privately owned businesses, factories, casinos, hotels, farms, land, ports, businesses, refineries, forests, ports, breweries, refineries, and other privately owned wealth and assets located in the USA that were created by previous US generations that can be sold to foreigners in order to pay people in foreign countries to manufacture the things that US citizens consume, and also to pay for expanded US government expenses when the expenses exceed the taxes raised by the US government Taxes by selling freshly printed US bonds and other US paper currencies.

What will the USA do after we have sold title to all of our privately owned US real assets that have any value to foreigners as required to settle our foreign trade obligations and government expenses, there will not be anything left that the foreigners will want to buy with their freshly printed paper US T-Bills, US bonds, etc.? The US government will then not be able to raise any funds for any possible future re-industrialization of the USA, and the US citizens will not have any possibility of employment or generating wealth in their future to buy back the assets that will be foreign owned.

If any future US revolution to overthrow the US government is successful and occurs for some reason, will foreigners hire the unemployed US military (and maybe various city policemen) to keep the US population under control, or to regain control, and/or to re-establish law & order after an economic collapse and the resulting civil unrest?

The Chinese Yuan paid by Chinese business owners to their US employees in the future might be the only currency with any purchasing value (to buy food, rent or anything else) after the US dollar’s buying power goes to zero (due to the current US government economic policies).

The foreign owners of US businesses will probably be the only source of currency with any buying power to pay the US military to install and/or enforce some foreign version of law and order upon the US citizens. If the unemployed and hungry US military are available and their families are hungry, they will accept food from any source in return for their allegiance and services.

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This is no longer the case as I know it. The IMF plays a big role just like the fed in most other countries.

A unit of exchange is valuable because people believe that their chances of having it will most likely satisfy their future needs. That is I would rather hold 1000 dollars to satisfy my future needs rather then holding 5 sheep. The odds of me trading 5 sheep in the future is not as likely as trading 1000. It is because dollars are more vendible.

It just so happens that gold became the most popular medium of exchange by choice. A long history of trial and error with units of exchange existed before gold, but gold ended up being the tried and true best monetary exchange performer after much test.

However it’s important to note that money is valuable not because it is backed by gold! If that were the case why wouldn’t money be backed by diamonds, rubies, or platinum? The reason is because those commodities are not as vendible as gold was, as decided by the vast majority of market participants.

But I would agree with you that we would be better off going back to a gold standard. The points you bring are just what I said above, more reason to rid ourselves of the current fiat fiasco. I think we can agree on that point no?

The high cost of business here is a result of various market interferences which have driven up cost, restricted supply, and created unnecessary barriers to entry for competition. It is protectionism that is the cause of our high cost of business. But even if we had no market interference some c ountries may still be able to produce things cheaper then us, and it would be in our best interest to trade with them.

For example, consider the two scenarios.

  1. Coffee is mass produced in central america and traded to the US.
  2. International coffee trade is restricted to the states only, and no internaitonal trade is allowed, we are forced to produce our own.

In situation 1 we enjoy the benefits of inexpensive high quality coffee while helping to bolster the central american economy. In scenario 2 we must create costly methods of producing the coffee domestically. The cost of coffee becomes a rich mans commodity only, fewer coffee is made, and both the US and central america is poorer because of it. It is the protectionism that has caused the shortage and high cost of coffee, but it is free trade that keeps it cheap and benefits all countries.

These concepts are best explained via the Division of labor and Comparative Advantage.

Yup so the question we need to ask ourselves is,

A) Why is our labor unnecessarily expensive (Some claim it is to support an expensive standard of living, but then one must ask why is our nice standard of living unecessarily expensive?)

B) Why is that capital and entrepreneurs are innovating outside of the country, rather than in.

I agree that our Education system is ridiculously messed up. There are more people leaving college with political science degrees that there are engineers, and engineers are in high demand in this country currently. However this erroneous behavior is the same as the housing bubble. What we have is malinvestment, not in property but in education. Since anyone and everyone can get a college loan, the direction of qualifications for schooling is no longer directed by market needs, but by other factors. People spend less time deciding what they want to do in college, in fact most don’t even know what they want to do in or after college.

All of this would be corrected if we dropped public schooling, dropped public secondary schooling, and removed the cheap credit system we currently have in place.

Yes it’s ironic actually that domestic people do not know what to educate themselves on, yet foreigners who are considered less educated know exactly what to do. Oh the irony…

It’s interesting, but unemployment in many engineering based industries is very low. I know of several petroleum engineering positions available that are starting people right out of college at 60k annually. Meanwhile students continue getting political science degrees.

The funny thing is if we just pulled our hands out of it, stopped trying to futs with everything and just let the market do it’s job. Our standard of living would skyrocket in just a few short generations while it’s costs would continuously be driven down.

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OK, here’s one link that is enlightening.

In particular I liked this line:

What the protectionists don t bother to explain is why U.S. wage rates are so much higher than Taiwan. They are not imposed by Providence. Wage rates are high in the U.S. because American employers have bid these rates up. Like all other prices on the market, wage rates are determined by supply and demand, and the increased demand by U.S. employers has bid wages up. What determines this demand? The “marginal productivity” of labor.

The demand for any factor of production, including labor, is constituted by the productivity of that factor, the amount of revenue that the worker, or the pound of cement or acre of land, is expected to bring to the brim. The more productive the factory, the greater the demand by employers, and the higher its price or wage rate. American labor is more costly than Taiwanese because it is far more productive. What makes it productive? To some extent, the comparative qualities of labor, skill, and education. But most of the difference is not due to the personal qualities of the laborers themselves, but to the fact that the American laborer, on the whole, is equipped with more and better capital equipment than his Taiwanese counterparts. The more and better the capital investment per worker, the greater the worker s productivity, and therefore the higher the wage rate.

Carrying this argument further, there are two possibilities. Either the workers in the US are worth the money they are being paid, or they aren’t.

If they are, then by the laws of supply and demand, they will keep getting their salaries without a tariff.

If they are not, then passing a law that protects their salaries is a law declaring that we must waste money, right smack dab in the middle of a Depression. How is this good? How is this even a stop gap measure?

You may argue: If the workers don’t get theirs, they will riot. In other words, they are a Mafia and as such deserve to be paid Protection money. OK then. let’s call a spade a spade. Let’s tell the citizenry they can buy goods from abroad as much as they want. In an unrelated item, let’s tell them they have to pay protection money to this mafia. Why screw them over twice, inferor goods AND protection money?

I looked up The federalist paper #42. It is not a history, it is Madison arguing that it is great to have a constitution. Nowhere does he prove that tarrifs are wonderful.

Another source:

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I’m probably saying something you already know, just thought I’d throw this into the discussion.

that’s the market price of labor

If they are not, then passing a law to protect their salaries will create unemployment. And in today’s gov’t atmosphere this entails more unemployment benefits, which further depletes capital, but since wages can’t drop due to a law or maybe even further laws to prop up wages as the purchasing power of the dollar is devalued (as the fiat expansion hasn’t stopped), then this leads to further unemployment. A vicious cycle.

[source: Planning for Freedom by Mises]

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Thanks.

Maybe I was unclear, and relied too much on context. By “passing a law that protects their salaries” I meant a tarrif. Not sure if that would cause unemployment. Although I seem to have read that it leads historically to huge losses in the industry being protected. Maybe this is because if they need “protection”, they are incompetent in the first place.

That book you linked to looks promising.

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In fact, it’s really good.

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cool

I’m thinking tariffs do the same thing, but I could be wrong. It would be nice if somebody could inform us in this thread cause now I’m really wondering about it.[:)]

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I am reading the Haslett book on-line, and I am enjoying it very much. I am going to buy a hard copy and read it as I travel next week.

I am a 71 year old engineer still working because I think that engineering is fun, even though it is no longer as profitable as it was. I have always been interested in economics since College required this course for engineers, along with business law and accounting in the 1950’s. My Economics instructor taught us preposterous lessons to the effect that no one had to work as long as we just manipulated the economy with government policy. I did not believe very much of anything that he said. The business law and accounting courses also benefited me greatly in by professional career.

I also cashed in my stock market investments in the spring of 2008 and avoided the loss of assets that most folks endured when they listened to their professional financial advisors. I also held onto my real estate investments which have appreciated greatly.

I agree with your statements about the “Rust Belt.”

The only reason to reduce unemployment is to prevent increases in criminal activity which would reduce personal safety.

I read that the US Government is going to extend unemployment benefits for ad additional 11 months. This will reduce the pressure on the unemployed to look for work. Maybe the unemployed in the Rust Belt need to relocate to where there ars some jobs available.

I assume that the USA will just print and sell more paper US Bonds to mostly foreign manufacturers, foreign banks and foreign individuals in China, India, Brazil, Pakistan, and other industrialized countries in return for the US dollars that these foreigners earned by making consumer goods for US citizens.

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yes. I heard about this too. And the unemployment comes about due to gov’t regulations, eg. minimum wage and purchasing power of dollar devaluing to name two reasons. And the unemployment benefits will further deplete capital to unproductive individuals and the depletion of capital is part of starting the whole devaluing and malinvestment process all over again. It is perpetuating the problem that depletes/diverts capital away from higher end investments and production becomes unprofitable, labor cuts, etc… vicious cycle.

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Is the USA about to enter a Post World War I Germany situation of massive inflation, mass unemployment, loss of the purchasing power of the US dollar?

Could we create the same results?

This is scary, but if we continue to spend the wealth created by previous generations to pay people not to work, pay for government payroll jobs, free medical services, make-work schemes, enmvironmental cleanups, singing in the park, and other activities that do not create wealth, then we are heading in that direction.

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Here in Houston our Petrochemical Industries are still in operation and employing US citizens. We are scared that the proposed “Cap & Trade” will cause our industries to relocate to overseas locations, and Houston will become another Rust Belt.

Our local Petrochemical Industry businesses know that even if they can economically survive the current proposed environmental legislations, more and more environmental legislation will be “piled onto” them in the future.

Evem if some company perfrormed an economic life cycle cost analysis that would justify some US located factory to stay in the USA today, the business managers relocate that factory to a foreign country in order to escape the costs of the anticipated future environmental regulations that the US government will almost certainly create.

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If the U.S. gov’t, ie. Fed Reserve, sustains their current policies then I see nothing preventing a massive inflation. This is why different countries at least on the surface discuss their inclination to dump the dollar. I believe the IMF has also commented upon this as being beneficial to the global market. BRIC, Brazil, Russia, India, China, discuss this inclination, as well as, middle eastern countries have commented on dumping the dollar backing oil exchanges, and if I remember correctly, Russia (maybe all BRIC) have inclined to take up a dollar dump on oil exchanges too. But then there is talk about a one world currency or some form of continuance of the IMF mixed currency basket that they’ve had ca. 30 years already.

singing in the park…lol[:)]

Yes. But if any of those actions violate property rights, then it could be a just(ice) consideration. For example, if it can be scientifically proven that pollution from a factory caused Cindy’s cancer, then that factory violated her property rights. Property is also semantically conceived in ones own person, as well as, in the labor that an individual has mixed his or her will with, ie. economic goods, and other tangible goods. This is where just law, as opposed to unjustices or uncivil participations in a society find clear delineations in order to have not only a prosperous but peaceful society.

As for gov’t payroll jobs (unjust), free medical services (that’s a chartiable response but unjust for gov’t to make such efforts).

Yes, depletion of capital is lowering the standards of living.

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cap 'n trade. yes, that’s an unjust, or what is also called in legal terms positive law.

And from what I understand about carbon credits (which might have to do with cap 'n trade directly but I’m not sure), they are exchanged on the market as derivatives are and it actually becomes more profitable to buy and sell these credits when pollution increases, thereby, the whole thing is a farce to begin with. I wish I could find the article I read about with that already happening on the global market. Take it with a grain of salt since I can’t find the source.

My point is what the gov’t says and what actually happens isn’t always precise. Unintended consequences seem to be the usual outcome in gov’t actions.

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Dear wilderness:

The Industrialized countries like China, India, Brazil, Pakistan, Taiwan, Singapore, and other industrial foreign nations view the United States of America as borrowing and spending huge amounts of US dollars (actually FED printed US Bonds, etc. sold to foreigners to get the US dollars back from the people who made the things that we consumed) with the careless abandon of a drunken sailor on shore leave, who only is concerned about today and will not plan anything or even think about tomorrow.

This US government attitude is very disturbing to those very same foreigners in industrialized nations that the US government hopes will buy more and more of our freshly printed paper US bonds (hopefully at not too much of a discount and/or not very high interest rates) to pay for our economic stimulations, wars, social programs, environmental activities, free medical care, bureaucrat payrolls, and other various necessary (and unnecessary) government expenses with the US dollars that the foreigners earned by making things for US consumers and then “loaned” back to the US government.

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Gerald,

I don’t think the USA will hyper-inflate. US citizens in general are far more educated than they were back then regarding inflation. There will be too much opposition against the Federal Reserve. The Fed’s primary purpose is to protect wall street bankers and the banking system - and they have done their job well. The Fed’s secondary goal is to serve Washington by monetizing the debt. If they have to choose, they will choose to save the banking system before Washington. In 1920 when Weimar hyper-inflated her currency the German central bank thought prices were rising not due to money printing. They did not believe that increasing the amount of currency in the system had influence on its exchange rate with commodities (ie commodity prices would rise) - but rather, they blamed greedy entrepreneurs for profiteering and their trade deficit (unfavorable balance of payments) which they claimed was responsible for the low German Mark exchange rate. They therefore did not stop inflating their currency. They printed Marks until they were worth zero. If you want to read more on this then read page 218 of Omnipotent Government book that I linked above.

Above I provided a linked to Planned Chaos, which I recommend. But when I linked that doc I may have been thinking about:

Interventionism: An Economic Analysis

Which is very similar to Planned Chaos. I recommend reading it before Planned Chaos. Both are good though (I totally forgot all about this book until Smiling Dave provided a link to it).

I found the following book that I have not read:

A Critique of Interventionism

I believe this would also be a good read.