Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
President Rand Paul would give libertarian economics a bad name
I watched Senator Rand Paul's announcement that he was running for president. He had good goals, but his economic ignorance was dismaying. For example, he argued that allowing American corporations to bring back profits from overseas at a low tax rate would encourage investment in American manufacturing.
Exactly the opposite. Doing so would not only make outsourcing more profitable, but it would also bid up the exchange rate of the dollar (American corporations would convert foreign profits to dollars), which would put even more American manufacturing workers out of work.
On the other hand, many of his goals were excellent:
He may be the candidate for President who is least tied to the crony-capitalist system that is becoming entrenched in U.S. economic policies. If he only understood economics, he could be a great president. Unfortunately, his economic policies would backfire. They would result in recession and increased loss of American manufacturing jobs, giving economic libertarianism a bad name.
We need a president who not only understands the need for smaller government and balanced budgets, but who also understands the need for balanced monetary growth and balanced trade. The combination of balanced budgets, balanced monetary growth and balanced trade would restore American prosperity.
Journal of Economic Literature:
Atlantic Economic Journal: