How long do you think the economy would take to straighten up if we only bought American goods, and if workers would do all jobs to get one, where immigrants wouldn't have the opportunities in our own country, how long do you think it would take for our country to get back on it's feet if we all stuck together?
Lady Bug
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It wouldn't take long because all of the U.S. currency would flow back into American Economy. But the reality is, is we outsource jobs to different countries, we buy and trade goods with different countries, and we allow those people from different countries to come in and set up businesses and live tax free while U.S. natives work like slaves and get ripped off by taxes to support them. This is not to be taken in a racial bias, but this is American reality today we own minimal here because we allowed others to buy us almost completely out.
Tad W
The problem would probably get worse. Consider that the Gross Domestic Product is calculated as the sum of Consumer purchasing, Investment, Government spending, and the difference between Exports and iMports. (GDP = C+I+G+ (E-M) If we shut the borders and didn't allow imports
the countries we currently export to would retaliate by closing their borders, cutting off our exports. Nations like China, that hold a large amount of US Government debt, would demand payment, which would require tax increases and a decrease in government spending,
The shortages caused by not allowing imports would cause localized price increases in areas where we currently import, and excess inventories to the companies that currently export. Both of these effects would aggravate the debt crisis, increasing defaults while making it harder for businesses to get loans.
The debt crisis would continue and worsen, and the banks would continue to hold "excess reserves" which would place a lot of deflationary pressure on the economy. The government would either have to allow deflation or they would have to try to counter it through monetary and fiscal policy, which would bankrupt the federal government. Monetary policy has already run out of wiggle room, and spending is at an all time high.
Closing the borders would be a very, very bad idea. Protectionism is bad policy under the best of circumstances. In an economic situation like we have today, it would be a major disaster, possibly resulting in war or dissolution of the nation.
John M
What you might see happen would be a decline in the standard of living for Americans. We would lose the benefits of comparative advantage in trade, and we would see substantial increases in prices for food, clothing and other consumer items. Wages might go up as well, as there would be higher demand for labor, but losing the comparative advantage of balanced trade would be a big problem.
Lets dig in to that part and modify your question: What if we established tariffs that required our trading partners to purchase the same value in our exports as we import from them? They could arrange three way deals so they didn't have to ultimately consume everything they bought from us, but we would have a balance of trade. This would allow us to increase our standard of living above the model you described, because we could let trading partners make whatever they are best at making, and we would buy that from them, and trade with them for the things we make more cheaply than they can make it.
Immigrants are not an obvious drain on our economy. Our companies exploit them by paying them less than the minimum wage, they often have to use false social security numbers to get employment, which means they pay social security and payroll taxes but are unable to claim the benefits that come from those taxes. They do receive free emergency care from hospital ERs, but since their employers are already paying them less than they would have to pay legal workers, the employers are really the ones that benefit by also not having to provide health insurance. When the employers benefit in a competitive industry, the consumer ultimately benefits through lower food prices or whatever the illegal immigrant might be doing.
I agree that a more effective trade policy would clearly and carefully examine the benefit to the United States before it agreed to trade with nations that run a trade surplus with us. A blanket open free trade policy is not necessarily better than a more carefully managed and monitored one. The devil is in the details, but we know how to calculate it.
Anonymous
it will take 5-10 years, and country will end up with much lower quality of life. B/c employing the current ~30 million unemployed will not be enough to compensate the loss of 100 million Chinese and 20 million immigrants working in or for the US.
crwlnjeep
Immigrants are not the problem!! Because of globalization only buying american goodss would drastically reduce the availability of many goods and drastically increase the price of almost all goods so if you increase income and increas price of goods are you better off.