If I were President of the United States, I would push for an across-the-board customs levy that would be automatically triggered with rises in the unemployment rate (let's call it the ABCDE - Across the Board Customs Duty linked to Employment - or A2E for short).
So let's say we set the target unemployment rate at 5%. At this rate of unemployment, the A2E might be zero. If unemployment rose to 6%, the A2E levy on imports might automatically rise to 5%. If unemployment rose to 7%, it might automatically rise to 10%. If unemployment rose to 10%, it might grow to 25%. The mathematical function would be clearly defined up front. But in effect it would be a balancing factor trying to keep jobs in the US.
To minimize governmental bloating, it would be truly across the board, so that the push of special interests does not see this ballooning into the complexity of the tax code! Also to give business some time to adjust, this rise in the A2E levy would be for 6-12 months out. Probably closer to 6 is better.
Thus if unemployment rises in January, it would mean that an additional A2E would be levied on all imports - from yoga mats to software - in July. Simple and far-reaching.
Socialism collapsed some years ago - its modeling of man solely as a producer turned out to be flawed. Despite highly complex planning associated with socialism, even highly skilled engineers could not buy bread in the stores. Now we see what can only be called the partial collapse of capitalism which has proved the folly of the modeling of man solely as a consumer. Through and despite highly complex free market structures, you might own an iPhone but you might not have a job.
There has to be a middle path. By recognizing that more-or-less full employment must be a fundamental part of our economic goals, the Across-the-Board Customs Duty related to Employment may be a sharp tool for achieving this balance between production-oriented socialism and free-market capitalism.
So let's say we set the target unemployment rate at 5%. At this rate of unemployment, the A2E might be zero. If unemployment rose to 6%, the A2E levy on imports might automatically rise to 5%. If unemployment rose to 7%, it might automatically rise to 10%. If unemployment rose to 10%, it might grow to 25%. The mathematical function would be clearly defined up front. But in effect it would be a balancing factor trying to keep jobs in the US.
To minimize governmental bloating, it would be truly across the board, so that the push of special interests does not see this ballooning into the complexity of the tax code! Also to give business some time to adjust, this rise in the A2E levy would be for 6-12 months out. Probably closer to 6 is better.
Thus if unemployment rises in January, it would mean that an additional A2E would be levied on all imports - from yoga mats to software - in July. Simple and far-reaching.
Socialism collapsed some years ago - its modeling of man solely as a producer turned out to be flawed. Despite highly complex planning associated with socialism, even highly skilled engineers could not buy bread in the stores. Now we see what can only be called the partial collapse of capitalism which has proved the folly of the modeling of man solely as a consumer. Through and despite highly complex free market structures, you might own an iPhone but you might not have a job.
There has to be a middle path. By recognizing that more-or-less full employment must be a fundamental part of our economic goals, the Across-the-Board Customs Duty related to Employment may be a sharp tool for achieving this balance between production-oriented socialism and free-market capitalism.
2 comments:
Nice one sir. But when US govt is not looking at long term perspective then how could it be implemented. They have elections coming up. Democrats and republicans opposing each other on each minute point and fedral reserve chief Ben bernanke said that now we have done everything to make situations better. Now its like US govt do not want more experiments with their economy till election. And sir dont you think your idea might have adverse effect on businesses and employment. It might be responsible for high cost of goods leading to less revenue leading to less bottom line profit leading to minimizing the cost leading to not employing any more workforce or less employment.
Sir might be wrong so please suggest me.
Thanks for very good insight
Hello Sir,
Nice article with good analysis.
Keep posting :)
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