From the Telegraph (HT: Serena):
The Chinese government has begun a concerted campaign of economic threats against the United States, hinting that it may liquidate its vast holding of US Treasury bonds if Washington imposes trade sanctions to force a yuan revaluation.
Two Chinese officials at leading Communist Party bodies have given interviews in recent days warning, for the first time, that Beijing may use its $1,330bn (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress. Shifts in Chinese policy are often announced through key think tanks and academies.
Barack — or do you prefer Jesus? or Kal-el, last son of Krypton? – let me get this straight. The bill that is sitting before you from Congress has many flaws and many strengths, like all bills. There are economists and policymakers for and against many parts of it.
But, there’s one part of the bill which strikes me, and nearly all economists as utterly ridiculous – the “buy American” provision. Think about the consequences:
- It forces the federal government to buy potentially more expensive goods, wasting taxpayer dollars which could have gone into creating more jobs or helping to shore up US banks.
- It poisons the ability for US companies to export their goods overseas, worsening the economic crisis we are in. Do the words, Smooth-Hawley Tariff ring a bell? You know, that massive trade restriction that was passed during the early days of the Great Depression that made everything worse?
- A very strong sovereign “strategic ally/competitor”, who provides cheap labor and cheap goods to the US, is now threatening to (a) destroy the US dollar and (b) stop buying US debt even though it costs their country immense taxpayer funds which they could have funneled into their own country’s well-being but have instead chosen to give to the US so that the US will continue to buy Chinese goods
Here’s hoping your advanced schooling see’s the obvious choice and talks your party into backing down on that one little clause.
