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Thread: Why are tariffs and preventing outsourcing of jobs a bad thing?

  1. #61
    LibForestPaul
    Member

    Quote Originally Posted by juleswin View Post
    When I was little, I used to wonder why the govt cannot just fix prices of ice cream so that everybody can afford it, then I grew up. The problem with tarrifs is that other countries would retaliate in kind when you impose tariffs on their products. Most likely, what the country gains in imports, they would lose it in exports and it would be a wash at the end. With the US, other countries could be so mad that they may decided to break free from the dollar. That is when people would really understand what hardship really is.
    Who care's if they retaliate? America w Canada, if only those two countries existed on earth, its inhabitants would live fine and healthy and well to do. Live for those citizens goes on without China, Cuba, Brazil, Germany, England.

    Now a country like Ireland, or Belgium, or Cuba, now those countries need to trade to even exist.



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  3. #62
    Quote Originally Posted by Lamp View Post
    My dad asked this question and I didn't know how to answer it

    The answer is that it isn't, in sé.

    Standard macro economic theories tend to ignore politics and assume some populations are not dangerous to others. This, of course, is an impossibly flawed assumption proven wholly false every single day that anyone has ever lived on this planet since at least the beginning of our recorded history.

    Because of bad actors who fail to play nicely with others, there are those circumstances where measures must be taken to neutralize actions that would otherwise result in harm to one's interests.

    Example: Nation A decides to produce fundamental widgets at a loss in order to drive competition from nations B, C, and D out of business, They make widgets of equal quality at 1/5 the price. The widget makers in B,C,and D would eventually go out of business because they simply could not compete with a taxpayer-funded loss-leader.

    The "government" of B institutes a tariff of 400% to bring the real cost of purchasing A's widgets within, say, 15-20% of what domestically produced units would cost. Some call this dirty pool, but in truth it is a defensive measure against what in this case is a clear act of economic warfare against your domestic widget industry.

    Widgeteers in C and D go out of business, but those in B survive, if worse for wear.

    Such interference is lousy. The necessity for it (assuming the desire to preserve something) is lousier still because it tends to lend credibility in people's minds to the notion that government is valid.
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