Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog

How to end the shutdown
Jesse Richman, 1/14/2019

Shortly before Christmas, with negotiations between the White House and Congressional leadership at a stalemate, congressional authority for spending in a number of federal agencies ran out.  As a result, these agencies lost the ability to spend money.  Essential workers are being required to work without pay, and non-essential workers are being required to not work.  Democrats recently passed bills to reopen the closed agencies ( but the Senate declined to take up the bills because of the threatened presidential veto.  

The Senate unwillingness to take up the bills highlights a key challenge for the Democrats' strategy in the shutdown which seems to be to crank up the pressure on moderate Republicans to the point where they are willing to abandon Trump and join veto-proof majorities to override a Trump veto.   Because the Senate majority leader has major influence over whether bills are considered on the Senate floor, such a strategy would -- to succeed -- have to win over Senate Majority Leader Mitch McConnell.  He is a long way from being won over now, as this Washington Post story discusses:  Democrats seem determined to relearn what Republicans found repeatedly during their period from 2011 through 2014: with control of the House but not the Senate, it is really really hard to get sharply partisan legislation onto the president's desk because you don't control the Senate agenda.  Back then Democrats mocked Republicans many efforts to pass a bill repealing Obamacare.  Today Democrats seem equally determined to beat their heads against a similar wall.

So what is the alternative path out of the shutdown?  Some shutdowns are over major issues of significant national import.  If this one was such a shutdown, then Democrats and Republicans might be justified in continuing it. Other shutdowns are over trivialities.  This one must rank nearly at the very top of the list of shutdowns over trivialities.  Whether or not the wall is a good policy idea, it is a minor one.  At stake is five billion in funding out of a Federal budget numbered in trillions.  To shut down the government, even part of it, with all of the chaos and costs that entails over an unwillingness to provide such funds so that the president can make a down payment on a signature campaign promise reflects a Washington in which partisan tribalism trumps policy sense.  And so, arguably, does shutting down the government in order to get such funds.

The solution then must provide a way for one tribe or the other to back down. Here's an idea -- a secret ballot...  


Comments: 0

Letter to Prof. Martin Feldstein of Harvard U
Raymond Richman, 1/4/2019

I’ve been an admirer of Prof Martin Feldstein for many years but his op-ed in the Wall Street Journal, “Tariffs Should Target Chinese Lawlessness, Not the Trade Deficit” (12//28/2018) has got it exactly backwards. Tariffs should not be used as punishment for lawless economic behavior. Although economists believe in the benefits of trade, they know, as John Maynard Keynes did, that “beggar-thy-neighbor” trade policies that result in job-losing trade deficits for the U.K. had to be fought with counter-measures. In the absence of a common currency, the preferred policy is a single-country-variable-tariff (our invention) whose rate increases   as the trade deficit widens and falls as trade is brought into balance.

Of course, trade need not be balanced with every nation but should be balanced  with the world of nations. Since the General Agreement on Tariffs and Trade was signed in 1994, the USA has had huge deficits with Japan, Germany and the European Union, and China, which amounted to $562 billion in 2016 of a total of $734 billion. This resulted in booming economies in those countries and relatively stagnant growth in the USA accompanied by the loss of millions of high-paying jobs in USA manufacturing. Free trade is possible but not with predators.


Comments: 1

  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    May 2021
    Apr 2021
    Feb 2021
    Jan 2021
    Dec 2020
    Nov 2020
    Oct 2020
    Jul 2020
    Jun 2020
    May 2020
    Apr 2020
    Mar 2020
    Dec 2019
    Nov 2019
    Oct 2019
    Sep 2019
    Aug 2019
    Jun 2019
    May 2019
    Apr 2019
    Mar 2019
    February 2019
    Jan 2019

    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    May 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    November 2016
    October 2016
    September 2016
    August 2016
    July 2016
    June 2016
    May 2016
    April 2016
    March 2016
    February 2016
    January 2016
    December 2015
    November 2015
    October 2015
    September 2015
    August 2015
    July 2015
    June 2015
    May 2015
    April 2015
    March 2015
    February 2015
    January 2015
    December 2014
    November 2014
    October 2014
    September 2014
    August 2014
    July 2014
    June 2014
    May 2014
    April 2014
    March 2014
    February 2014
    January 2014
    December 2013
    November 2013
    October 2013
    September 2013
    August 2013
    July 2013
    June 2013
    May 2013
    April 2013
    March 2013
    February 2013
    January 2013
    December 2012
    November 2012
    October 2012
    September 2012
    August 2012
    July 2012
    June 2012
    May 2012
    April 2012
    March 2012
    February 2012
    January 2012
    December 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010
    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term
    Environmental Regulation
    Real Estate Taxation

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • Votersway Blog
  • Watt's Up With That


  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]