On Friday, the U.S. Census Bureau announced that the U.S. goods
and services trade deficit was $45.7 billion in January, up one billion dollars
from $44.7 billion in December. January exports were $176.5 billion, $3.8
billion less than December exports. The reduction in U.S. exports
predicted by Romney just happened, but Trump is not yet president. On
February 26, the Bureau of Economic Analysis announced that U.S. economic
growth slowed to a measly 1.0% during the last quarter of 2015, but Trump is
not yet president. Billionaire investor Jim
Rogers predicts a 100% chance of a U.S. recession within a year. If
he is correct, a recession will occur, whether or not Trump is elected
president.
It is true, as Romney claims, that Trump has called for
tariff-like penalties to prevent American factories from moving abroad and also
to bring currency-manipulating countries (including China, Japan, and Mexico)
into trade-balancing negotiations. But would Trump's tariff threats slow U.S. economic growth?
No! Exactly the opposite!
Trade-surplus countries
have a lot more to lose from a trade war, so Trump's negotiations would likely
succeed. For example, in 1981, Congress threatened trade-balancing import
restrictions against trade-surplus Japan, which resulted in President Reagan
negotiating "voluntary
restraints" on Japanese automobile exports. As a result,
Japanese automobile companies built factories in the United States that
continue to employ American workers and to buy American-made
auto parts, greatly increasing American incomes…….
How Trade Deficits Have Been
Hurting the U.S.
When countries run trade
surpluses with the United States, they give us trade deficits. Those
trade deficits reduce aggregate demand for American products, American incomes,
and investment in American factories. In his speeches, Trump has focused
upon the three countries that have large trade surpluses with the United
States: China, Japan, and Mexico……….
(Full text at link below)
Effect of Trump's Trade Balancing on the U.S.
So if Trump succeeds, how much would his trade balancing help the
U.S. economy? Doing so would cause businesses to locate new factories
within the United States. Since R&D gets located near factories, new
innovations would be invented in the United States. Since workers learn
by doing, American workers would gain on-the-job skills, increasing their pay
over time. Since American workers buy services from American service providers,
American entrepreneurs would prosper. In sum, Americans would get more
pay, more factories, more R&D, more innovations, and a more prosperous
country.
Trump is the only candidate
who has consistently opposed TPP. Although he voted against
fast-tracking it on final passage, Senator Cruz had helped TPP get momentum by
co-authoring an op-ed
with Paul Ryan in its favor. The other Republican candidates have always supported TPP, and Hillary
Clinton was part of the administration that negotiated it. All are
members of the Republican/Democrat establishment consensus, which supports
overseas production in return for campaign contributions.
And TPP is not just about
trade. It is also part of the open
borders agenda, to which the establishments of both political parties
subscribe. Under TPP,
foreign service providers will be able to recruit cheap workers in Mexico and
Malaysia and bring them legally to the United States to take American
service-sector jobs. The destruction of the American middle class will
accelerate. The popularity of socialist candidate Bernie Sanders tells us
where this is going.
The economic case for Donald Trump is clear. If any other
candidate is elected, U.S. economic growth will continue to stagnate in the 1%
to 2% range. In contrast, Trump's trade policies would return the United
States to its normal 3% per year growth. If any other candidate is elected,
median U.S. family income will continue to decrease, but if Trump is elected,
it will return to its normal increase. Under Trump, the U.S. middle
class, a bulwark against socialism, will gradually be restored.
The Richmans co-authored the 2014 book Balanced
Trade: Ending the Unbearable Costs of America's Trade Deficits, published
by Lexington Books, and the 2008 book Trading Away Our Future, published
by Ideal Taxes Association.
Read full text at: http://www.americanthinker.com/articles/2016/03/would_trumps_trade_policy_really_cause_a_recession.html#ixzz42KVUrnQi
