Could U.S. Stimulus Package Hurt Canada

[Wilber]

Guess the question for the rest of the world is whether the US is going to become isolationist again. Hasn't worked before and it is now generally recognized that trade barriers made the Great Depression worse. Brings to mind the comment about all US politics being domestic as well as a certain definition of insanity.

[Born Free]

Obama isn't preaching anything...it is US federal law from 1933.

Yes he is.....its his "Buy American" provision of his stimulus package.

Probably...but again the point is that we use such tactics at will, regardless what G-20 rubes may think is fair.

Sounds like sumpthin' your moron Pres. Bush would say. However, it isnt about "fair"ness.... its about agreeing to something. Besides, why would you call yourself a rube?

[kimmy]

I had heard that while agreeing to the restriction on non-US steel, similar constraints on other foreign products (such as wood...) were rejected.

Spending federal grant money on US-made goods is not the same as erecting trade barriers. (however, federal specifying the procurement of US-only goods for these projects might in itself be a violation of NAFTA... I imagine teams of lawyers are studying that closely.)

Overall, I'm skeptical of whether it's a smart move, however.

Requiring the use of US steel instead of cheaper imports from Korea or China or wherever might make US steelworkers happy. However, it will also raise the cost of raw materials in the projects, which will limit the scope of what can be accomplished with the money specified, which will ultimately mean less US workers are employed during the building of these projects. Robbing Peter to pay Paul, as it were, except that in this case Paul works at a steel plant and Peter works in construction.

-k

[bush_cheney2004]

Guess the question for the rest of the world is whether the US is going to become isolationist again. Hasn't worked before and it is now generally recognized that trade barriers made the Great Depression worse. Brings to mind the comment about all US politics being domestic as well as a certain definition of insanity.

Correct....if the conditions that gave rise to isolationist policies are renewed, then there will be moves in whole or in part to return to such policies in the short term, same as before. The US is only one of many nation states that act in right or wrong self interest, just like the the rest of the "world".

Until the "world" comes up with a better version of "insanity", then it shall be the American version for now.

[Born Free]

.........Requiring the use of US steel instead of cheaper imports from Korea or China or wherever might make US steelworkers happy. However, it will also raise the cost of raw materials in the projects, which will limit the scope of what can be accomplished with the money specified, which will ultimately mean less US workers are employed during the building of these projects. Robbing Peter to pay Paul, as it were, except that in this case Paul works at a steel plant and Peter works in construction.

-k

BINGO!

[bush_cheney2004]

Yes he is.....its his "Buy American" provision of his stimulus package.

Such provisions are rooted in age old practices and federal law for government procurements.

Sounds like sumpthin' your moron Pres. Bush would say. However, it isnt about "fair"ness.... its about agreeing to something. Besides, why would you call yourself a rube?

Agreeing to what? Agreeing to make rubes force the US into WTO hearings? It's all part of the game, because the bottom line is that they want access to the big fat US market.

Edited February 1, 2009 by bush_cheney2004

[bush_cheney2004]

.....Spending federal grant money on US-made goods is not the same as erecting trade barriers. (however, federal specifying the procurement of US-only goods for these projects might in itself be a violation of NAFTA... I imagine teams of lawyers are studying that closely.)

That's OK...as we have been teased with abbrogating NAFTA on both sides of the border come election time anyway.

[Wilber]

Until the "world" comes up with a better version of "insanity", then it shall be the American version for now.

The definition I was thinking of was continuing to repeat the same action while expecting a different outcome. Are you laying claim to that particular version?

[Born Free]

The definition I was thinking of was continuing to repeat the same action while expecting a different outcome. Are you laying claim to that particular version?

GOAL!!!!!!!!!!!!

[bush_cheney2004]

The definition I was thinking of was continuing to repeat the same action while expecting a different outcome. Are you laying claim to that particular version?

Exactly...the very definition of insanity according to Einstein. The "world" not only expects America to resume massive deficit spending and consumption, but it is going to fight over getting a piece of the action.

[Wilber]

Exactly...the very definition of insanity according to Einstein. The "world" not only expects America to resume massive deficit spending and consumption, but it is going to fight over getting a piece of the action.

I think the argument is that only a shared insanity has a chance to work, the question being, which insanity is the least worst. A trade war not being the least worst.

I kind of agree with kimmy, paying more for materials will just reduce bang for the buck somewhere else and the result will be a wash at best. Same goes for our upcoming stimulus and deficit.

[bush_cheney2004]

I think the argument is that only a shared insanity has a chance to work, the question being, which insanity is the least worst. A trade war not being the least worst.

There have always been trade wars...in and outside of strategic trade agreements. Canada just happens to be over invested in this round of the outcome should Obama's package get approved. But this bed was made long ago.

I kind of agree with kimmy, paying more for materials will just reduce bang for the buck somewhere else and the result will be a wash at best. Same goes for our upcoming stimulus and deficit.

Right...but there is a political return on investment that transcends dollars, be they Canadian or American. Bang for the buck has never been the highest priority for the US. Thoughts of your Gun Registry also come to mind !

Edited February 2, 2009 by bush_cheney2004

[Wilber]

Right...but there is a political return on investment that transcends dollars, be they Canadian or American. Bang for the buck has never been the highest priority for the US. Thoughts of your Gun Registry also come to mind !

f

Unfortunately true for governments in general, the gun registry being a perfect example.

[Oleg Bach]

Lets just send them all of our scrap metal and let them convert it to "American Steel" after all we send them our garbage anyway. The new administration in America know one thing..that to "hurt" Canada would not be in their best interests...when you are hurting yourself. This announcement is just pandering rhetoric to make the American industrialist feel secure and confident...but - it's just talk....the term "stimulus" is really a no starter anyway...if you really want protectionalism and real stimulation - start by removing all stimulus from China and let them rot.. What are they going to do if we stiff them for the bill? Nuke us?

[bush_cheney2004]

Lets just send them all of our scrap metal and let them convert it to "American Steel" after all we send them our garbage anyway.

Yes, please send more so we can send you a bigger invoice!

The new administration in America know one thing..that to "hurt" Canada would not be in their best interests...when you are hurting yourself. This announcement is just pandering rhetoric to make the American industrialist feel secure and confident

Sure...that's why Canada sweats what is happening with the American "stimulus package" while the Americans don't take such cues from Canada......you have a much smaller package!

...if you really want protectionalism and real stimulation - start by removing all stimulus from China and let them rot.. What are they going to do if we stiff them for the bill? Nuke us?

I like China...very pragmatic compared to some of the loons in Canada.

[Sulaco]

GOAL!!!!!!!!!!!!

You are as tiresome here as you are elsewhere.

As a general comment:

B_C2004 is of course correct. The way to fix the US economy, and the way it will ultimately be fixed, is by having the dollar devalue and thus fixing the trade imbalances. Now don't get me wrong - China's investment in the USD has been wonderful. They have taken a cut of their production (basically our money spent on Chinese products) and have used it to prop up the USD so as to maintain their exports - thus returning to us a portion of what we spent. They and others, addicted to selling in the US, have subsidized our high standard of living for decades.

That cannot last forever. The dollar will drop - especially if Obama can get this package in now - China will be left holding a large amount of worthless reserves, the US market will close to despotic regimes everywhere simply by the functioning of economics. Savings rates will finally go up here. The enviros will be happy in the short term as the US ends it's horrible consumption (in the long term of course the US will be far lest interested in greenism). The socialists will be happy as America's economic imperialism will end - it will make much more sense for domestic companies to invest in the US once the dollar drops, instead of lining the pockets of various potentates through "economic imperialism".

And the ROW can rot. As I said - they hoped for this, and pretty soon they will get it. Meanwhile I will no longer be able to buy giant TV's but I live in a wonderful land - it'll still be pretty good.