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I don't understand Fred Bergsten of the Peterson Institute for International Economics. He worries about currency manipulation, appropriately, but wants all the new trade agreements and to remove export controls on sensitive technology. Yet he favors including a Value Added Tax in the U.S. tax mix, reducing other non-border adjustable taxes.
He said all this in a Washington Post piece today, in the context of Obama's State of the Union statement that we want to double exports in five years. I previously noted and criticized that Obama statement as more of the same "export only" failed approach... unless the subtext or underlying strategy is to address unfair import competition. Bergsten says we can do that easily with the extra-special-Bergsten-plan which, by the way, makes little sense.
His first point is that a strong dollar is generally bad, that Asia manipulates currency, and we should increase pressure on them to revalue. A decent point except the remedy of persuading them to revalue is a proven failure.
His second point is that we must pass the Korea, Colombia and Panama trade agreements. He says those bilateral agreements increase imports but save jobs. You read it right - increasing imports save jobs. He apparently saw the data that past bilateral trade agreements are a trade deficit debacle, and then makes stuff up saying job creation occurs. Yes... it makes zero sense. Up is down. Black is white.
His third point is that we are restricting too many exports on "alleged national security and foreign policy" grounds. We need to allow those exports of sensitive technology to geopolitical rivals? Yup... so China can steal more of what we designed and invented, better develop its already threatening military capabilities, and leap another 40 years ahead without doing the work. What exactly is he smoking?
Lastly, his fourth point is to adjust the U.S. tax system to include a value added tax that could be rebated at the border. This is eminently sensible.
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