Ron Paul opposes linux - was Re: [OT] Isolationist vs. Non-Interventionist [was: Re: HB 139]

Merrill Oveson moveson at gmail.com
Tue Jan 29 01:32:10 MST 2008


This is what a trade deficit is and its implications:

Suppose I own a business called Japan Cars of America.  I buy cars from
Japan and distribute them to dealerships in America.
Step 1) I need to buy the cars from the Japanese.  Since the Japanese need
to get paid in yen I go to a bank, any bank, and buy yen with dollars.
Step 2) Suppose the bank I buy the yen from is in Japan.
Step 3) I take the yen and buy cars from Japanese.  I then take delivery of
the cars.

Now the Japanese bank now has dollars.  I have cars.

Now the Japanese bank can do several things with the dollars one of which is

a) sell the dollars to other japanese who would then turn around and buy
american goods or services
b) buy interests of debt - such as bonds (They're certainly not going to
just stuff the dollars under their mattresses.)

Lately, the Japanese and other countries that hold a trade surplus with the
US have been using their dollars to buy intruments of debt such as bonds.
This causes the trade deficit - that is instead of spending those dollars on
american goods they've been buying debt.

So a trade deficit is merely a measure of the amount of good and services
that are exported vs imported - that's it - don't fall into any trap of
feeling bad or good about it.

There are several implications about a trade deficit that are positive:
a) guarentee of future employment - instruments of debt will eventually be
redeemed and spent
b) since the gov't, for example, is anxious to borrow money and the
Japanese, in this example, are willing to use their dollars to purchase this
debt - interest rates are kept low.  If the Japanese weren't interested -
then the US gov't would need to find someone else to loan them the money -
and would thus be forced to raise the interest rate to attract investors.

There are implications about a trade surplus that are negative - one is the
following.
a) the bond market can crash - and those holding the trade surplus can in
effect lose their dollars

In fact, our trade deficit has been financed thru the sale of US gov't
bonds.
Also many economist will argue that carrying a trade surplus is worst than
carrying a trade deficit - in effect we're in the driver's seat.  We could
afterall, simply say "we're not going to repay the bonds.  Of course we
could only do this once."  (The city of New York tried this once in the
80's.  The bond holders sued and a judge told the city - you can't default -
once you do the city is finished - go raise taxes, cut costs - but no
default.  This makes municipal bonds and very safe investment - along with
US gov't bond and t-bills.)

There are, of course, arguments against having a trade deficit - one is, at
least in the short term, this can affect domestic employment - more "things"
currently being produced abroad rather than at home.

Think of this as chemistry, you always have to have an equal sign, if one
things goes up something else has to go down.  Actually the whole universe
operates on this principle - it's all double entry accounting - whether it's
chemistry, physics, economics, finance, whatever.





On 1/24/08, Michael L Torrie <torriem at chem.byu.edu> wrote:
>
> Bryan Sant wrote:
> > On Jan 24, 2008 10:38 AM, Nathan Blackham <kemotaha at gmail.com> wrote:
> >> I agree that we shouldn't force democracy on everybody.  That isn't the
> part
> >> that I call isolationist.  It is that Ron Paul ( at least from his
> >> presidential bid website) thinks that all the international
> organizations
> >> are bad :
> >>
> >> "So called free trade deals and world governmental organizations like
> the
> >> International Criminal Court (ICC), NAFTA, GATT, WTO, and CAFTA are a
> threat
> >> to our independence as a nation."
> >> "We must withdraw from any organizations and trade deals that infringe
> upon
> >> the freedom and independence of the United States of America."
> >
> > Wow.  I like Ron Paul even more now.
>
> Hmm.  Given that the US is a country with a massive trade deficit, this
> is quite possibly one of the most bizarre ideas I have ever heard.  And
> no, enacting protectionist policies will not change this trade deficit,
> and I don't think it benefits American industry.  If anything it puts
> them at a disadvantage because they will be cut off from access to the
> world's markets.
>
> But I guess all empires have to fall sometime.
>
> >
> >> He also includes the UN as part of those organizations.  I would call
> this
> >> an isolationist.  I feel that we need to work within some of these
> >> organizations to resolve conflicts peacefully.
> >
> > Can it get any better?  Go Ron!  The UN is THE most corrupt cesspool
> > of dog vomit.  They are 100% anti-American, pro-world government, and
> > their taking up prime real estate in NYC.  Kick them out!!
> >
> >> I do understand that not everyone views him as an isolationist.  From
> my
> >> reading on his website, it has led me to this conclusion.  I understand
> that
> >> he still wants to trade with the rest of the world, he just doesn't
> want to
> >> do it in a framework that has been built to promote fair trade.
> >
> > That would be consistent with the framework of our founding fathers.
> > The government should have power to tax profits (income is not profit
> > it is a trade) via corporate tax, and apply tariffs to incoming goods.
> >  America is the largest SHOPPING MALL in the world.  Countries who
> > want to sell goods in the world's largest shopping mall should pay for
> > the privilege to do so -- not unlike a vendor having to rent a store
> > front in a real mall.  I know it's not quite this simple, but "fair
> > trade" laws exist so that globalized corporations can make a product
> > in China, India, etc., and then bring it into America without having
> > to pay a dime.  This produces a trade imbalance, blah, blah, blah...
> > It's bad.  Bad business model for Americans.  Good business model for
> > global corporations...  Of which I'm a minor share holder...  Woohoo!!
> >  Go 401k go!
>
> Wow.  That's amazing.  You want to pay for things twice, eh?  First of
> all, the reason that foreign countries can sell their goods to us is
> because we the collective people want those goods.  I mean are you for
> or against the free market?  Seems ironic to me that the country that
> espouses freedom and the idea that the government should get out of the
> business of running peoples lives could be so protectionist.  On this
> point Ron Paul is totally contradicting his own position on the role of
> government.  I think this point of view completely contradicts the
> intent of the founding fathers.
>
> Also I think you (Ron Paul perhaps?) grossly overestimate America's
> future impact on the world economy.  The moment OPEC starts trading oil
> in Euros instead of dollars, we are in serious, serious trouble.  To say
> nothing of the looming food crisis (two bad years in a row will cause
> food prices here in america to go up dramatically because the supply is
> now zero-sum).
>
> Protectionism destroys competition and stifles innovation, leading to
> higher costs and ultimately inflation, all of which affect us here
> domestically, not globally.
>
> Now as for the subject line, given Ron Paul's position, he *has* to
> oppose linux. After all, large parts of linux itself were developed
> *outside america* and they can come in and compete without paying a
> single dime to the American government (or people, it's unclear what
> you're talking about here) in the so-called "American Shopping Mall."
> What about our poor, beleaguered, home-grown Microsoft?  How can they
> possibly stay in business?
>
>
>
> >
> >> Nathan
> >
> > Thank you for further illustrating the virtues of Ron Paul.  BTW - I'm
> > not a Ron-ulan.
> >
> > -Bryan
> >
> > /*
> > PLUG: http://plug.org, #utah on irc.freenode.net
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> > Don't fear the penguin.
> > */
> >
>
>
> --
> Michael Torrie
> Assistant CSR, System Administrator
> Chemistry and Biochemistry Department
> Brigham Young University
> Provo, UT 84602
> +1.801.422.5771
>
>
> /*
> PLUG: http://plug.org, #utah on irc.freenode.net
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>



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