It's a big topic in the national and international news this week, President Obama wants to enforce a "buy American" provision into his new stimulus package. That sounds reasonable doesn't it, an American leader wants to stimulate his economy by injecting 875 billion more dollars into his economy and for this he is simply asking that certain projects be built and materials supplied from the USA only companies. Is there really a problem with this?
To the average guy this seems like it makes sense, quite logical really. The problem is economics isn't always that logical and in most cases a very complicated beast! Here is why it doesn't work. First off global trade is one of the main reasons the USA is so wealthy, open borders and trading with over 250 countries makes for good business. When you shut the door on trade, you shut the door on trade going out. The other issue is the unrelated "buy American" products that may not come into the country like oil.
Obama's plan has a lot to do with buying steel from American steel makers only. The US currently trades steel with many countries including Canada which it also receives a huge amount of energy from. Buying energy from a friendly neighbor makes more sense than buying oil from the middle east, doesn't it?
The global economy is just that, global and messing with the hundreds of trading partners can have dire consequences! Whether or not the stimulus plan is the best route for the US is really suited for another article all by itself. Cutting off ties with trading partners during these times is only going to make things worse for everyone, especially the US.
I think we all need a reminder that there is still lots of food for everyone and while housing has been hit hard and jobs has been lost most of us have still have a roof over our head. This current crisis is a complicated one but very different from the great depression. Will stimulus or tax cuts get us out of this recession? I think only time will tell, people need time to rethink what is important and time to become more comfortable with the markets whether they be stock or housing.
Quick band aid solutions will only cause problems down the road. The bottom line is the US is printing money and past the issue of causing problems with many trading partners what is going to happen when that money comes back into the economy? Things might be bad today, but what happens when all of this stimulus money turns into massive increases in inflation?
Again only time will tell, there are lots of experts out there and they don't agree on much. Imposing "buy American" only clauses within a stimulus package is one of the few things most economists agree won't be good for anyone!
Author Resource:-
This article was written by Shawn Wilson, a member of the customer support team at Datepad, where internet dating is always free. Datepad has a massive directory of informative dating articles along with a great list of dating site reviews on their dating blog.
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