The “stimulus” bill’s “Buy America” provisions are having negative effects on international trade. Our trading partners are suffering, as are we, through higher costs and lower efficiency.
Adding injury to insult, President Obama’s budget posits a massive tax increase on American corporations with foreign operations. As this Cato Institute video notes, the advantages foreign corporations already enjoy as a result of US tax policy will increase.
Tax increases cost jobs. A targeted American tax increase targets American jobs. Such jobs will not be “exported,” they will just disappear. The world only needs so many people who can assemble a computer or fasten a lugnut. These jobs will only be available where free employers can profitably provide them. Government, as a pseudo-employer, can only provide them by incurring ever increasing debt.
Given Obama’s demonstrated preference for union ownership of the means of production, his astounding ignorance of economics and his aforementioned protectionist tendencies, his tax increase will lead to demands for higher tariffs – to “level the playing field.”
These tariffs will have been unnecessary except for American policy. Remember that when your job disappears, or if you contemplate asking for a subsidy or tariff to preserve it.