The Central Forward Party

1. International
   1. We are an international world economy
      1. We have an international labor market
         1. Corporations will continue to use labor from other countries to lower their costs.
            1. Trump’s pressure on China is going to move jobs from China to different parts of the world, not the United States.
            1. Places like Southeast Asia, Africa and India will have cheaper labor to provide to us for the next 50 to 100 years. It will be at least that long until they become fully industrialized and wages become similar throughout the word.  It may never happen.  
   1. Almost every major industrialized country has extremely large debt in excess of 100% of GDP.
      1. Many countries implemented tariffs after World War II to protect their infant industries.
      1. These countries are now fully industrialized, and tariffs are no longer necessary.
      1. We should approach our trading partners and offer to lower our tariffs if on their goods if they will agree lower their tariffs on our goods and services. This will result in lower prices and will stimulate economies around the world.
      1. We need to analyze the tariffs for each country compared to our tariffs to make sure that we can lower tariffs as suggested.
      1. We also need to compare the lost revenue from the tariffs to the projected income (taxes) the governments would receive from the growth that would be stimulated.
         1. The goal is to eliminate tariffs over time
         1. This will need to be accomplished over 5 to 10 years
            1. These countries need the revenue from the tariffs
            1. The income they will receive from taxes will replace the income they received from tariffs due to lower prices and increased consumption.
            1. This may result in increased inflation that will allow each country to pay down their debt over time with cheaper dollars.
            1. If we can get our major trading partners to agree to this plan, we can then go to China as a united force.
               1. We should go to China and ask them to be part of the world economy. However, the[DY1] y need to abide by a unified set of rules.
               1. These would include protections against stealing intellectual property.
               1. Europe, England, Japan. Australia, South Korea and Canada represent over 80% of the world’s GDP. China would need to be willing to abide by our rules or lose competitive access to these markets. We would implement prohibitive tariffs on Chinese goods if they do not abide by our rules.
               1. China is losing the competitive price advantage they once enjoyed.  We can get goods produced as inexpensively and often less expensively in other countries.
               1. China’s economy is highly industrialized.
                  1. Wages are increasing
                  1. They are developing their own intellectual properties that they

will need to protect.

• China will continue to grow because they have many employees in farming. At one time growth was defined as the movement from Agrarian to industrial. Most countries are fully industrialized. For that reason, that definition no longer applies.
  • It is also one of the reasons that growth is much lower than it was in the past
    • Lower interest rates are also a byproduct of excessive debt. Most industrialized countries cannot accept higher interest rates, or they will not have enough money to take care of their other financial responsibilities like infrastructure.
      • China still has 80% of their employees in agricultural jobs.  They have enormous growth potential. They can meet the needs via internal growth. They are very self-sufficient.
      • However, they still need to export goods and services to manage their balance of payment deficit.
  • We need to see ourselves as part of the world order and understand that our view may not meet the needs and desires of the rest of the world. We are not right about all things. We need to negotiate an acceptable set of rules for the world and give teeth to an organization in which we will not have complete control. This will require a set of rules we feel we can support.
  • Belt and Road initiative.
    • This is a brilliant plan that gives China a competitive advantage in selling their goods and services to Southeast Asia, Northern Africa, Tajikistan. It also allow them to get goods and services like oil to Europe.
    • Many of the countries who agreed to participate are now having financial difficulties. Thus, China may not be receiving their interest income for these loans
    • We need to come up with a plan to compete with China for this business.
    • We probably need to give corporations a double tax credit for transportation to make them more competitive against China because of the Belt and Road Initiative.
  • Infrastructure- We need to come up with a plan to upgrade our infrastructure such as bridges and roads.

 [DY1]