# It's time to establish trading blocks **URL:** \ **Category:** Great Debates\ **Created:** [October 5, 2010, 1:26pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111 "2010-10-05T13:26:47Z")\ **Posts on this page:** 13\ **Page:** 6
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [November 11, 2010, 12:08pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/101 "2010-11-11T12:08:38Z")
> [@Le\_Jacquelope](#): > > China has tariffs and protectionist measures up against us. Why are you against us doing the same to them? > > Smoot Hawley is NOT the same thing as slapping tariffs on low wage nations. Smoot Hawley was a blanket tariff against everyone. Protectionism is protectionism. Do you really believe a trade war with China will help the US economy? All it will do is increase costs for consumers. Besides, we already are in a “trade block” called NAFTA. And it’s super duper popular. > [@Le\_Jacquelope](#): > > If China gets ugly about it, default on all debt owed to them and cut them loose. Bite the bullet, take the economic punch to our noses, dust ourselves off, pick ourselves back up, and cut them off until they can meet Oh that’s a brilliant suggestion. So your solution is to trigger the collapse of the US dollar, massive inflation and even more unemployment?:rolleyes: > [@penultima\_thule](#): > > What’s sauce for the goose is sauce for the gander: > > [Federal Prison Industries, Inc., also known as UNICOR and FPI](http://en.wikipedia.org/wiki/Federal_Prison_Industries) > > The federal prison industry produces 100% of all military helmets, ammunition belts, bullet-proof vests, ID tags, shirts, pants, tents, bags, and canteens. Along with war supplies, prison workers supply 98% of the entire market for equipment assembly services; 93% of paints and paintbrushes; 92% of stove assembly; 46% of body armor; 36% of home appliances; 30% of headphones, microphones, speakers; and 21% of office furniture > > [The Prison Industry in the United States: Big Business or a New Form of Slavery? - Global ResearchGlobal Research - Centre for Research on Globalization](http://www.globalresearch.ca/index.php?context=va&aid=8289) And here I thought it was just license plates. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [November 11, 2010, 3:14pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/102 "2010-11-11T15:14:22Z")
Regarding reciprocity, haven’t we really reached it? The Chinese surplus is unsustainable-we know it, The Chinese know it. So either the Chinese will have to buy more from us, or we will have to buy less from them. Bernanke has announced a virtual dollar devaluation-so if the Chinese counter (by lowering prices) the trade imbalance will continue. Which means thatthe Chinese really like things the way they are. All the negotiations in the world won’t change that. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 11, 2010, 8:33pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/103 "2010-11-11T20:33:18Z")
> [@msmith537](#): > > Protectionism is protectionism. Do you really believe a trade war with China will help the US economy? All it will do is increase costs for consumers. Ah that old saw again. What good are cheap Chinese products when you are earning $0 a month? No one has ever been able to answer that. Maybe you can. Again - why is it ok for China to have protectionism but not us? > [@](#): > > Besides, we already are in a “trade block” called NAFTA. And it’s super duper popular. Yeah, free trade with low wage nations will do that. Ever ask yourself why so many Americans HATE NAFTA and why so many HATE offshoring? None of us are buying what you guys are selling. > [@](#): > > Oh that’s a brilliant suggestion. So your solution is to trigger the collapse of the US dollar, massive inflation and even more unemployment?:rolleyes: NEWS FLASH! We’re going to see a collapse of the dollar anyway. I guess you’d rather we stay the course and go kaboom naturally, through the unsustainable route of hundreds-of-billion dollar import deficits, sustained high unemployment and sustained drains on the social welfare system. Let me repeat: the way we’re going, we’re going to have a collapse of the entire economic system ANYWAY. Then we’ll put a hundred MILLION Chinese out of work then when we can no longer afford their goods. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 11, 2010, 8:35pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/104 "2010-11-11T20:35:46Z")
> [@ralph124c](#): > > Regarding reciprocity, haven’t we really reached it? > The Chinese surplus is unsustainable-we know it, The Chinese know it. > So either the Chinese will have to buy more from us, or we will have to buy less from them. > Bernanke has announced a virtual dollar devaluation-so if the Chinese counter (by lowering prices) the trade imbalance will continue. > Which means thatthe Chinese really like things the way they are. All the negotiations in the world won’t change that. Plus they also have import tariffs against us. But it’s okay for them; it’s “protectionism” when we do it. Anyone want to wonder why their job growth is off the charts compared to ours and why they got out of their recession so fast? ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 12, 2010, 12:53am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/105 "2010-11-12T00:53:55Z")
The _US Chamber of Commerce_ puts the loss of American jobs due to offshoring at a minimum of 2-4 million. > **[GOP, U.S. Chamber Of Commerce Beat Back Bill To Combat Outsourcing](https://www.huffpost.com/entry/gop-chamber-of-commerce_n_741970?view=print)** > > GOP, U.S. Chamber Of Commerce Beat Back Bill To Combat Outsourcing “In 2004, Chamber head Tom Donohue made the case that outsourcing shouldn’t be a concern because only “two, maybe three million jobs, maybe four” would be lost.” The EPI puts the estimate at jobs lost to offshoring at more than 5 million: [http://epi.3cdn.net/58f222c3caaded4953\_r8m6iv1t8.pdf%20\ **Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [November 12, 2010, 5:04am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/106 "2010-11-12T05:04:25Z") > [@Le\_Jacquelope](#): > > Anyone want to wonder why their job growth is off the charts compared to ours and why they got out of their recession so fast? Anyone want to wonder why China’s per capita GDP is a fraction of ours? > [@treis](#): > > Another concept you are misinterpreting. Giving one’s “Full faith and credit” simply means that you will use every available resource to repay your debt. It does not mean that I am unable to default on the debt. Basically, for a person, the scenario goes: > > Me: I want a $500 loan. I will back it with my full faith and credit. > Bank: Ok here’s $500 bucks. > > 1 year later. > > Me: I can’t pay. > Bank: But we have a valid debt backed by your full faith and credit. > Me: You sure do. > Bank: So… > Me: I can’t pay > > Cut to court room scene > > Bank: We have a valid debt against treis. > me: Yep, and I can’t pay. > Judge: treis is bankrupt. Debt is no longer valid. > > The same thing applies to countries. The only difference being that you can’t take a country to court to claim a debt. Basically, the conversation ends with: > > USA: Yes, your debt is valid, but we aren’t going to pay it. Tough titties. Actually, it’s nothing like that. The US can simply be “ok…we’ll just print you $500 because we are the reserve currency for the world.” Except now your $500 isn’t worth as much. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 12, 2010, 10:45am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/107 "2010-11-12T10:45:23Z")
> [@msmith537](#): > > Anyone want to wonder why China’s per capita GDP is a fraction of ours? Of course their GDP is far lower than ours but they’re growing. What are we doing? We’re sinking! We have companies like Hewlett Packard laying off 30,000 American workers and hiring 30,000 Chinese workers and those 30,000 American workers have no job to go to. You need to show how offshoring got those 30,000 laid off Americans better jobs and frankly ma’am neither you nor any other offshoring proponent here has ever been able to do that. If we did not have offshoring we would not have lost those 30,000 jobs. Or the 2 million OTHER jobs (minimum case scenario, according to the US Chamber of Commerce) that we’ve lost. Do you realize what getting back 2 MILLION jobs would do to our unemployment percentages? Tax revenues? Our ability to pay down the debt? Why should Americans care about China’s per capita GDP when we have Americans here who are going homeless because their per capita income is $0? ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 12, 2010, 10:52am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/108 "2010-11-12T10:52:45Z")
> [@msmith537](#): > > Actually, it’s nothing like that. The US can simply be “ok…we’ll just print you $500 because we are the reserve currency for the world.” Except now your $500 isn’t worth as much. You forget that when the dollar value collapses and inflation happens (in this case, import price inflation, one of 8 different types of inflation) your debt loses its punch. Just as surely as more dollars are chasing the same amount of goods, it is also true that more dollars are chasing the same amount of debt, because the debt isn’t (usually) growing with inflation. We’re talking [basic economics](http://tutor2u.net/economics/content/topics/inflation/costs_of_inflation.htm) here: inflation (aka “your $500 isn’t worth as much”) means the real value of the national debt would diminish. What you should have pointed out was that the cost of imports such as oil would go up, among other problems. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [November 12, 2010, 12:57pm UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/109 "2010-11-12T12:57:55Z")
> [@Le\_Jacquelope](#): > > You forget that when the dollar value collapses and inflation happens (in this case, import price inflation, one of 8 different types of inflation) your debt loses its punch. Just as surely as more dollars are chasing the same amount of goods, it is also true that more dollars are chasing the same amount of debt, because the debt isn’t (usually) growing with inflation. > > We’re talking [basic economics](http://tutor2u.net/economics/content/topics/inflation/costs_of_inflation.htm) here: inflation (aka “your $500 isn’t worth as much”) means the real value of the national debt would diminish. > > What you should have pointed out was that the cost of imports such as oil would go up, among other problems. What do you care? Your suggestion is just to default on the debt anyway. ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 13, 2010, 1:27am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/110 "2010-11-13T01:27:04Z")
> [@msmith537](#): > > What do you care? Your suggestion is just to default on the debt anyway. It’s not so much a suggestion as it is an inevitability. With the draconian (read: _fantasy_) budget cuts the coming GOP Congress wants to enact, we’re still looking at a _$400 billion budget deficit._ These budget cuts will cause benefits to be curtailed which will put the thumbscrews on consumers and reduce spending by consumers at the many businesses that depend on them, leading to unexpected drops in tax revenue. Plus a LOT of unrest. All this, _and the debt will continue to rise by $400 billion_, which means it will still be pushing us toward the point of no return. Plus, a lot of Republicans have been talking about stopping Congress from approving increases in the debt ceiling… if they succeed, this move will totally bypass any of the silly arguments about whether defaulting is unconstitutional. This will cause an IMMEDIATE default, but it depends on whether the Republicans have the balls to go through with their threats… which is of course quite doubtful. But still, let’s get back to what I do care about: the fact that your argument about $500 not being worth as much totally left out the fact that diminishing currency value hurts the creditor, as well as (or even more than) the debtor. Oh, and the United States CAN, in fact, say “Yes, your debt is valid, but we aren’t going to pay it. Tough titties.” If the Republicans make good on their threat to refuse to accept a raise in the debt ceiling, we will in fact be saying that. What’s China gonna do? Attack us with their _Dr. Evil pinkie moment_ 50 nukes? ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [November 13, 2010, 3:46am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/111 "2010-11-13T03:46:32Z")
> [@Le\_Jacquelope](#): > > Oh, and the United States CAN, in fact, say “Yes, your debt is valid, but we aren’t going to pay it. Tough titties.” No, we can’t. > [@The US Constitution](#): > > The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. > [@](#): > > What’s China gonna do? Attack us with their _Dr. Evil pinkie moment_ 50 nukes? Actually, we need to worry more about the majority of the debt held by US citizens. Fortunately, the public debt is backed by t[he full faith and credit of the US government](http://www.publicdebt.treas.gov/), so your foolishness about defaulting is just that - foolishness. Look, we know you hate the Chinese. That is not a good enough reason to violate the Constitution, and any public official who suggests it or tries to bring it about can and should be impeached and removed from office. Regards, Shodan ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [November 13, 2010, 3:58am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/112 "2010-11-13T03:58:19Z")
ETA - you think we got economic troubles now? Wait until you see what the world economy looks like after a fourteen trillion dollar default. Regards, Shodan ---
**Author:** ![Le\_Jacquelope](https://avatars.discourse-cdn.com/v4/letter/l/e0b2c6/32.png) [@Le\_Jacquelope](https://boards.straightdope.com/u/Le_Jacquelope)\ **Post date:** [November 13, 2010, 6:29am UTC](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111/113 "2010-11-13T06:29:28Z")
I forgot to add for the “defaulting is unconstitutional” crowd… If Congress refuses to raise the debt ceiling, what can the Supreme Court do? Tell them to do it? Bang their gavels really really hard? And if the Republicans still refuse, then what? Send the men-in-black Constitutionalizers in with mesmetrons to brain zap them and make them do it? Arrest them? Talk shit about them on Air America? Call in George Soros? What can the USSC do if Congress flat out refuses to raise the debt ceiling? Anyone got an answer for that? [Previous page](https://boards.straightdope.com/t/its-time-to-establish-trading-blocks/556111.md?page=5)