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Is the following a way to fix US trade imbalance without tariffs?
Foreign item costs $4000 whereas US made item costs $5000. US Gov pays US maker $1000/item sold to US consumers for $4000. Hence US company will increase employees by factor of 5 to meet new demand and thus increase US IRS tax revenue by enough to offset the $1000 Gov gift. Any well run company can achieve a 80% reduction in production cost ( I e 90 % learning curve) which will entirely eliminate the need for the $1000 US Gov subsidy.
NOTE: This is no countries Business except the US.
1 Answer
- Anonymous3 years agoFavorite Answer
Yes,we can do that, and we have done it for years. The Japanese might have to remember the Plaza accord until today. But this way is not successful for the US.