Fmr. Sen. Hollings: Afghanistan Unnecessary -- Trade War Necessary

[brentspeak]

Stimulus efforts -- provided they're done correctly -- are necessary right now. But Hollings is correct to point out that the root cause of our economic ills is our nation's suicidal "trade" policy.

http://www.huffingtonpost.com/sen-ernest-frederick-hollings/afghanistan-unnecessary_b_647582.html

Sen. Fritz Hollings
Former South Carolina Senator
Posted: July 15, 2010 12:12 PM

snip

There's no mystery to the loss of jobs. Princeton economist, Alan Blinder, in February 2007, long before the recession, estimated that in ten years the United States would be losing on an average of 300,000 jobs a year to off-shoring. But President Obama has yet to learn to compete in globalization. He furiously bails out the economy boat with stimulation but fails to plug the off-shoring hole in the bottom.

snip

President Obama could begin to fight in the trade war by calling on Congress to eliminate the corporate tax and replace it with a 2% VAT. This would promote exports, eliminate a principal cause of off-shoring jobs, and provide more revenues. Don't tell me about needing sixty votes to get it done. Let them vote. Those opposing will be voting against eliminating "the highest business tax," voting to continue to lose jobs and voting against more revenues to pay down deficits. At least the President would show he is trying rather than studying.

We all know that President Bush started the war in Afghanistan, deploying 30,000 troops. President Obama has had a year and a half to stop forcing a Muslim country to change its culture. Instead, President Obama calls the war necessary and commits over 100,000 troops. We all want the troops sacrificing in Afghanistan to feel that Afghanistan is America's war. But a Gallop poll would show it's no longer America's war. It's definitely a war of "Obama's choosing."

snip

As editor of a law review and professor of law, President Obama has learned to look to authorities or advisors. There are many things about President Obama to admire, but his advisors, Secretary of the Treasury, Timothy Geithner, and economic advisor, Larry Summers, ought to be put on weekend leave to rest, so the rest of the country can go to work.

[johnaries]

1. Replace the corporate tax with a VAT?

Pure quackery.

[brentspeak]

2. Every other industrialized nation has a VAT tax

And the Democrats support the concept.

http://www.cbsnews.com/8301-503983_162-20001918-503983.html

The U.S. should consider using a European-style value added tax to help bring the deficit down, said White House adviser Paul Volcker in response to a question from CBS MoneyWatch.com at a panel discussion in New York City Tuesday night. "We have to think about really revamping the tax system," said Volcker, who's best known for successfully beating down inflation while serving as Ronald Reagan's Federal Reserve chairman. The VAT, a levy on all the goods and services you consume, is not a "toxic idea," he added.

White House adviser Paul Volcker
(Credit: AP)

Until recently, discussion of a U.S. VAT had been limited to the back rooms of think tanks and cocktail hours of high-minded conferences. But nearly every other industrialized nation has one, and the idea is beginning to spread. In addition to Volcker, the head of the Senate Budget Committee, Kent Conrad (D-N.D), has mused that a VAT has "got to be on the table," and Speaker of the House Nancy Pelosi (D-Calif.) has murmured sweet nothings about it. In fact, interest in a VAT is cropping up all along the ideological spectrum (albeit more often along the leftish end).

The case for a VAT is simple: The U.S. government's fiscal gap is widening by the hour. The deficit for 2009 alone was a cool $1.4 trillion, and it's projected to hit $1.6 trillion this year. By the end of the year, the Office of Management and Budget says the gross federal debt will stand at $13.8 trillion. As Bruce Bartlett, a former Reagan economic advisor who supports a VAT, puts it, "The U.S. needs a money machine." A VAT, because it touches every transaction, is just that: The Congressional Research Service estimates that each one percent of a value-added tax would raise $50 billion. That's real money.

[brentspeak]

3. s/k

:kick:

[Catshrink]

4. I don't understand this

"President Obama could begin to fight in the trade war by calling on Congress to eliminate the corporate tax and replace it with a 2% VAT. This would promote exports, eliminate a principal cause of off-shoring jobs, and provide more revenues."

Who pays the VAT? Is it consumers? Does this mean instead of corporations paying taxes we do? (Not that some of them do now, eg Exxon.)

I really don't know how this works - I'm not being snarky.

[xchrom]

5. Kicking because I'm hoping more people will supply more info. Nt