Sunday, January 9, 2005

Another thought on stinginess

One of the criticisms leveled against the United States is our "consumption" lifestyle, which is manifested, in part, by a large trade deficit with much of the world.

If we were to dedicate a larger portion of our incomes to disaster relief, (either through charitible donations or through increased taxation), we would have to spend less on luxury items (which I am defining as anything more than basic neccessities). The vast majority of our trade deficit comes from just a few sources: China, the European Union, OPEC, Japan, Canada, Mexico, and South Korea. OPEC and Canada are the only two in the list for which our deficit is primarily natural resources (although we do import some raw materials from the others, it is manufactured goods that provides the bulk of our imports). What would happen to the economies of these countries if we were to stop buying their goods in order to donate more money to charity?

Imagine the effect on Germany if consumers stopped buying expensive cars from BMW, Mercedes and VW/Audi/Porsche and bought less expensive products from Ford and GM, in order to send money to assist natural disaster victims in Africa and Asia. Imagine what would happen to Japan and Korea if we were to stop buying new electronics when the old stuff broke, and instead repaired the old items; we have plenty of repair techs, as they fall under "services", the one portion of trade in which we enjoy a global trade surplus, and labor is by far the largest portion of repair costs. Somehow, I am sure that if we were to stop buying imported comfort items and converted the savings to emergency relief funds, the rest of the world would continue to scream; the only thing that would change would be the words to the song.

posted at 09:52 AM | permalink | Comments (0)