This letter of mine – available here by scrolling down – will appear in the print edition of tomorrow’s (September 4th’s) edition of the Washington Post:
Regarding the Sept. 2 news article “Treasury secretary downplays bond market concerns”:
Treasury Secretary Scott Bessent described the sentiment of all but one of the members of the Group of 20 Tuesday, saying that “we believe that non-market-based economies pushing out a never-ending stream of cheap exports is not sustainable.”
Bessent’s correct that the continued exportation of goods at prices below cost is unsustainable. But it’s unsustainable for the exporting countries, not for the United States.
Americans are enriched by the opportunity to purchase goods at prices that are partly subsidized by foreigners. There’s nothing unsustainable about our ability to buy and consume such goods.
What’s unsustainable is foreign companies’ ability to continue to sell their exports to us at prices below costs. If foreign companies are indeed engaging in this self-destructive folly and, as Bessent seems to think, are intent on persisting in it, they will eventually transfer all of their wealth to us. They’ll then no longer be able to afford it, and so it must end. But the resulting damage falls on foreigners, not on Americans.
True champions of a “put America first” policy should cheer, not jeer, foreign companies’ determination to sell exports to Americans at prices below cost.
Donald J. Boudreaux, Fairfax
The writer is an economics professor at George Mason University.
