New Warhorn Media post by Tim Bayly:
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I could listen to Dr. Von Hagen discuss almost any subject and be content. I wouldn’t necessarily understand it, but he would have my attention.
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I truly appreciate this post. I have several questions:
Regarding reciprocity, are non-US markets for goods and services closed or restricted to US producers by either laws or regulations? Are markets around the word as open and free to US producers as the US is to non-US producers?
Has US past agreement to the WTO been driven by an unhealthy desire on the part of the US to consume more than we should?
Do tariffs have a short term role as a tactic in opening up markets around the world to US producers?
Is the rate and scope of US sales tax the same as the rate and scope of VAT assuming no middleman or one middleman in the production process?
Can tariffs incentivize production of goods and services which is currently taking place in other countries to return to the US? Would this create additional jobs in the US? What effect would additional jobs in the US have on the US economy?
What would be the effect on the US economy and government balance of payments to abolish al non-profit exemption from income and real estate taxes?
What would be the effect on the economy of eliminating corporations and making the owners of corporations (as indicated by stock ownership) personally responsible for the income, assets and liabilities of the enterprise (in proportion to their ownership)?
Finally, concerning the final comments on US military leadership, does it require US troops to be stationed around the world in static deployments, or does it require the US to project power?
I am eager to hear your answers.
Grace and peace,
Paul
The live Zoom videoconference with Juergen and Tim promised in the podcast will take place on Tuesday, 2025-04-29T18:00:00Z.
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Dear Paul,
Welcome. I am passing a link to your questions to Pastor von Hagen. He’ll be on the Zoom meeting this coming Tuesday at 1PM CST (2PM EST). Hope you will join us.
Warmly,
Thanks, I am looking forward to hearing Jurgen’s answers and despite my questions, I do have an open mind on this issue.
Love, grace and peace,
Paul
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Questions on trade and tariffs.pdf (131.2 KB)
Dear Paul, lots of goods questions. Many of them would make the topic for one or two sessions in class… Anyway, the attached has my attempts to answer them within reasonable spacce and time. Hope to see you tomorrow.
Stay blessed, Juergen
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Thanks again for your responses. I appreciate your generous spirit. I do think that the US trade balance reflects the markets closed to US producers and the laziness of US corporations, as well as government waste and fraud.
The standard of living in the US has gone down in my lifetime, since the 70’s, and our debt service is not sustainable. Corporations pursue quarterly profits at the expense of long term investment, and there is unhealthy consumption by individuals (a moral judgement).
Careful case by case analysis of trade restrictions is ideal and good, but I suspect it will not happen in the world, because emotions get involved, pride and resentment, and rationality is a casualty.
Low skill jobs are not the jobs we want to return to the US.
In a heterogenous society where there is no agreement on what is good etc, there is no basis for enterprises being tax-exempt. Anything worth supporting will be supported, churches included.
Finally, more control by enterprises (which are not corporations) is a good thing. Personal responsibility for enterprises by the owners is also a good thing. There is a role for the government and private institutions and enterprises in research and development-where intellectual property is protected.
Thanks.
Trade Current Account Net Foreign Assets.pdf (601.6 KB)
Dear Paul, nice to meet you - if only electronically. I expanded the pdf slides by a few at the end that deal with your question of sustainability of public debt.
Be blessed.
I enjoyed listening to this today, though I missed some of it.
An interesting takeaway for (economics novice) me was Juergen’s explanation of the importance of realizing that “government debt will never be repaid.” If I followed, a government’s ability to write debt is more or less just a reflection of the world’s expectation that the country or government will go on enduring indefinitely. Beyond that, it sounds like it’s mostly a question of how much the country’s political climate is willing to bear in terms of what portion of the government expenditure goes to servicing debt.
I went away thinking that if I boil it all down, it really comes down to which country in the world is perceived to have the biggest stick with which to beat other countries. Hegemony and power will naturally shift toward that country. If a country can achieve that status, then economic dominance sort of happens on its own, regardless of what it took to get there?
I don’t pretend to be any sort of expert on the topic, but this discussion plus the brief allusion to Germany’s military spending reminded me of the MEFO bills, and the way that the Third Reich essentially gambled their economic future on the expectation of achieving military dominance.
Thanks for hosting this.
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Yes, that was a key point which rejiggers my brain. Glad you found it helpful, dear brother.
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Thank you both! It was fun, though I only watched it, rather than participating. I was just reading an article that finally helps me figure out the question I wanted to ask. Here is the quote that got me thinking:
According to WTO statistics, 66 anti-dumping investigations were initiated against China in the first half of 2024 alone, more than in the whole of 2023. Even Russia, China’s “no-limits” friend, has acted to stem the flow of Chinese cars into the country.
The implication here seems to be that China is indeed able to affect other countries through its behavior. If I recall correctly from the livestream, @Juergen said that China can’t force us to buy stuff. Americans are just buying too much. On its face that sounds reasonable. But doesn’t supply from China at least affect demand in the USA? In other words, if you drop the price and increase availability, don’t we expect demand to increase?
I’m more familiar with the concept of big companies lowering their prices artificially below the level that anybody can be profitable in order to drive competition out of the market, so they can essentially be a monopoly.
Is that similar to what China is doing to the US?
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Jason, thanks for your comments. Your understanding in the first paragraph is right, but your conclusion in the second one is a non-sequitur. What makes public debt different from private debt is the assumption that government does not have a finite lifetime. That assumption is not necessarily based on the country’s status as a hegemon or having the biggest stick. England has issued bonds that will never expire (called “perpetuities”) not too long ago, and England is certainly not a hegemonic country. What is needed is political stability. You see that very clearly by watching bond yields of countries facing major political upheavals. When bondholders perceive that the nation as they know it may disappear, they will try to sell whatever debt they hold of that country quickly. Northern European countries have a long history of public debt and they are certainly in no position of hegemonic power.
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Thank you, I understand what you mean.
I did not mean to conflate stability and hegemony. I guess my mind just goes right to hegemony because I’m an American, which is to say I’m something like a fish that doesn’t know what it means to be wet. 
God bless.
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Joseph, thanks for your comments. If I walk into a grocery store and see that they sell candy at really low prices, does that “force” me to buy candy though I didn’t intend to buy candy when I entered the store? No!! You may say that the store induced me to buy candy instead of other stuff, but no “force” was applied. I saw the price, decided to buy, and that’s it. You have to be careful not to fall into the #me-too trap: “We are victims of those evil Chinese who force us to buy…” No-one who walks out of a store having bought something was “forced” to do that. It is a matter of free decisionmaking. And yes, lowering prices may (perhaps!!) make people buy more of the stuff you want to sell. Just like warmer temperature make people wear lighter cloths. There is no force involved.
Furthermore, I have trouble understanding what it means to say that “Americans are just buying too much.” That is a moral statement and it lacks content because it doesn’t specify what “too much” refers to. There is some idea of a right level of buying behind it, but what is a right level of buying? Is there a standard for it? Is it something people would agree on?
Finally, yes, in some markets large companies may try to drive out competition by selling their products at prices at which their competitors (not “anybody”) cannot make profits. This requires that the large company is indeed large relative to the size of the market as defined by the amount consumers will buy. Which is the reason why we think international trade is beneficial: It increases maket size, makes “large” companies relatively small, and hence sustains more competition than national markets without international trade. In other words, the story you have in mind is plausible under certain circumstances, but not always. Companies being “big” is certainly not a sufficient condition. To see whether it applies or not is the task of the WTO in the international context and the Federal Trade Commission in the national context.
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I think “producing more than you consume” is a fair rubric for this for individuals, families and countries. Obviously there are exceptions, but in general they should be temporary and specific.
How would you judge this?
My apologies. I must have misremembered you saying Americans were simply buying too much.
At the company level, nobody has any problem with a company doing a better job competing. I was referring to accusations (whether true or not, I don’t know) of large companies intentionally losing money temporarily, by selling products at below the cost anybody could produce them, in order to get a monopoly position. Then they can jack up the price without competition.
However, thinking about it now at the country level, I assume your point is that Chinese companies are making a profit at the prices they are selling. The US companies simply cannot compete, whether because of cost of labor or something else.
But if that is right, then I wonder, what exactly is “dumping”? Assuming they can produce it and make a profit at some price, why would there ever be such a thing as dumping, and it be considered bad?
Also, if dumping is bad, I don’t understand why we should simply rely on the WTO to tell us whether China is being unfair. How would we ever send a complaint to the WTO to investigate if there wasn’t some way for countries to figure it out on their own?
Well, for an individual, a family, a company or a government, it would be expenses exceeding income.
For a country, it would be a trade deficit.
Sorry…I got confused. Was thinking you meant actual production for a family.
Yeah, living within one’s means makes sense as a good rubric.