On his radio spot today, CBS newsman Charles Osgood spoke about the U.S. trade deficit. Here’s the whole transcript and a button to listen in, if you wish.
I sent the following letter to Mr. Osgood in response:
9 August 2006
Mr. Charles Osgood
The Osgood File
CBS Radio News
Dear Mr. Osgood:
Your
report today on the trade deficit missed some important points. First,
when the U.S. trade deficit increases, Americans do not necessarily go
further into debt. If, for example, BMW sells cars to Americans and
then uses the dollars it earns to build a factory in South Carolina,
the U.S. trade deficit rises even though no debt is created by these
transactions.
Second, as the example of the BMW factory in South
Carolina highlights, the size of the capital stock isn’t fixed. Much
foreign investment in the U.S. creates productive capital goods that
would not otherwise exist. So, you’re mistaken to say that a rising
U.S. trade deficit means that foreigners are "buying America." As has
been true for much of our history since 1607, foreign investment in
critical to making America.
Sincerely,
Donald J. Boudreaux
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I think you forgot to put in something about Osgood being a blithering idiot. For stuff like this:
'For the next 75 years more than 150 miles of Interstate 80.Including the INDIANA toll road will be run by a pair of Spanish and Australian companies that will collect the tolls, operate the pit stops, maintain the highway and TRY to make a profit. If somebody offers to sell you the Brooklyn Bridge. maybe you should BUY it before some foreigner does.'
Note the phrase, 'TRY to make a profit'. Because Cintra-Maquarie will be almost certain not to after paying the state of Indiana $3.8 billion upfront for the privilege of collecting a present value of $ 1.9 billion by the state's own estimate.
None of the other bidders offered more than $ 2.8 billion for the Indiana Toll Road, which ought to tell Osgood that we should be drooling at the prospect of foreigners overpaying for the Brooklyn Bridge.
The people of Indiana are using the $3.8 billion to construct new roads for their use, while the shareholders of the Spanish-Australian consortium have seen the value of their investment lose something like 13% in the last year.
This is so remniscient of the 80's. It was Japan who was buying up US real estate….
This whole idea of foreign ownership is, in my opinion, completely deluded and nothing more than fear mongering. People act as if when foreigners purchase land in America it becomes part of their country, like an embassy or something. However, as should be obvious to all, foreigners can do nothing more or less with their land than an American can. Therefore, they still pay property taxes, they still follow zoning laws, etc.
And of course, there's one other disingenious portion of this. When BMW buys land to build a factory or Japanese business people buy a golf course, who are they buying it from? Newspeople would have us believe that the money is into some abyss. However, most likely, the money is going back to us Americans. Perhaps they should change the slogan from "Foreigners buying America" to "Americans getting rich from Foreigners."
Where did you get the '1607' from?
thanks,
/s
1607 is the year that the English established a settlement at Jamestown, Virginia.