[Rhodes22-list] Reduce your federal income tax (political humor)

[DCLewis1 at aol.com]

Stan,
 
In my view Mr Friedman has an overwhelming handicap, he’s a  tenured 
economics professor at a renowned University.  We should not  assume his deliberations 
have much to do with the real world.
 
You may be old enough to recall that Mr Friedman played an  dominant  role 
during the Nixon administration.  I believe he was on Nixon’s Council  of 
Economic Advisors, or something like that.  He claimed that by  modulating monetary 
policy ($ in circulation) you could control inflation.   After attempting the 
theory for several years, with no hint of success, he left  government service 
and commented he was sure he was right but the time constant  for monetary 
policy might be very long.  It’s exactly that type of small  theoretical 
oversight that plagues his statement in your post.
 
The small theoretical oversight that appeared in his material in your post  
is that In the real world you can’t simply buy from the lowest priced vendor to 
 maximize your standard of living - unless you have something to sell in  
return that generates the liquidity for your purchase.  Exactly what is  that 
thing you are going to sell?  Mr Friedman posits "If you are the best  body parts 
supplier...."; in fact, there is no reason at all to assume that "we"  are 
the best or uniquely capable at anything much less body parts. What we  can 
guarantee is that we have some of the highest labor costs  and strictest 
environmental regulations in the world - but neither  are a plus.  As a practical 
matter, anything you can manufacture  in Edenton can be manufactured  cheaper 
somewhere else - so what are  you going to sell back?   There's no substantial 
protection for  intellectual property in most of the world, so what are you going 
to sell  back?
 
>From my perspective it's not enough for Mr Friedman to speculate regarding  
".... endless unimagined enterprises ..." that we could pursue to generate the  
liquidity to support our foreign purchases.  Friedman needs to be  specific 
as to how liquidity will be generated, and he needs to demonstrate his  
proposal will work in the real world in a credible time frame.  Our  inability to 
generate liquidity is demonstrated in the humongeous trade deficit  that has been 
going on for decades - it's a big problem.
 
Dave