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Richmans' Trade and Taxes Blog
Tom Goergen foresees the coming financial crisis
The Democrats and Republicans in Washington are getting together this week on new financial regulations. But they are ignoring the cause of the last financial crisis and of the next. Meanwhile, writing in The Pilot, a local Soutnern paper, Tom Goergen nails it:
The classical economists would realize that we are not receiving the gains from trade by specializing in the production of one commodity in which we have a comparative advantage (say technology) and importing something which we are relatively less good at (say textiles); we are importing pretty much everything and exporting pieces of paper. These pieces of paper will impair our ability to finance the really important things in the future, such as wars, infrastructure investment and recovery from economic or natural disasters.
Balanced trade can grow forever. Unfortunately, imbalanced trade eventually bankrupts the trade deficit countries. Isn't there anybody in Washington who understands what is happening?
Comment by KELLY , 4/31/2010:
AS LONG AS THE FLAKE SQUAD RULES WASHINGTON
WE ARE DOOMED TO RECIEVE THE BENIFITS OF A PROFOUND SUPIDITY.
HANG ON-- THE REAL RIDES COMMING
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