Dear free traders: what will you say when the dollar collapses and imports are too expensive?

[Zalatix]

Before you claim our trade deficit can't devalue the dollar, please see this:
http://economics.about.com/od/exchangerates/a/trade_deficit.htm

http://www.frbsf.org/education/activities/drecon/1999/9910.html

In fact, the decline of the dollar is already putting a dent into offshoring:
http://mises.org/daily/2883

What will the poor nations of the world do when our dollar collapses and we can no longer buy their goods? What will they do when our foreign-held debt turns us into another Greece? What will the free traders say when it's currency exchange rates, not tariffs, that put a dead stop to offshoring?

Nothing, I suppose. Most free traders argue up and down that the dollar doesn't devalue in the face of huge trade deficits. Which shows they know absolutely nothing about economics.

Feel free to pass this around.

[YellowRubberDuckie]

1. Free trade will end the world economy...

...and it will lead to more isolationism. There's no other alternative. I think we need to trade with each other, but it should not be free trade. The only people it actually does anything for are the people who already have all the wealth.

[orpupilofnature57]

2. Trickie Dick knew that...

Just like HMO's.

[YellowRubberDuckie]

3. HMOs are going to kill us all...

...unless we get single payer PRONTO! The right wing is always talking up death panels and asking why you want your government between you and your doc. Dude, you already have a money grubbing CEO and his death panel of insurance nurse douche wads between you and your doc. I'd take the government over THAT any day.

[snappyturtle]

4. +1000 ! nt

[orpupilofnature57]

9. Since 1973

http://en.wikipedia.org/wiki/Health_Maintenance_Organization_Act_of_1973

[melm00se]

5. if imports grow too expensive

what happens to our exports?

a weak currency causes imports into the lower value currency country to go up but the counterbalance is that exports from the country with the lower currency to cost less in the stronger currency value country.

that makes our:
Civilian aircraft
Semiconductors
Passenger cars
Pharmaceuticals
Automotive Accessories
Other industrial machines
Fuel Oil
Organic Chemicals
Telecommunications
Plastics
(US top exports)

cost less overseas so the sectors that manufacture them so there will be a counterbalancing increase in production thus jobs.

[Zalatix]

6. Bingo. Welcome to the world of competitive devaluation, it's the #1 reason why China is winning.

Their artificial currency devaluation is far and away a bigger advantage than their tariffs.

A dollar collapse would mean the return of everything from consumer electronics jobs to textiles and call centers.

Brush up on your Mandarin, Chinese customers will be calling us!

[NNN0LHI]

7. The people here who understand this won't discuss it

Here is the simple version:

http://useconomy.about.com/od/tradepolicy/p/Trade_Deficit.htm

Why an Ongoing Trade Deficit Weakens the Economy:

An ongoing trade deficit is detrimental to the nation’s economy over the long term because it is financed with debt. In other words, the U.S. can buy more than it makes because the countries that it buys from are lending it the money. It's like a party where you’ve run out of money, but the pizza place is willing to keep sending you pizzas and put it on your tab. Of course, this can only go on as long as there are no other customers for the pizza, and the pizza place can afford to loan you the money. One day the lending countries may decide to ask the U.S. to repay the debt. On that day, the party is over.

[Zalatix]

8. If any free traders even dare come into this discussion they'll try to take it off-topic

with their John Birch Society rants and other bullshit.

[BarbaRosa]

10. What will the freetraders say? Easy.

It's Obama's fault.

Get used to that phrase, it's gonna be with us for a long time.

[rusty fender]

11. Obama is a free-trader

It won't be his fault, but he will have helped it along: NAFTA, Columbia Free Trade Agreement, South Korea Free Trade Agreement, etc.

You think that he will be without any blame?