[quote]phaethon wrote:
[quote]orion wrote:
If you produce stuff that other people can produce better your are hurting yourself and them economically. If times are already hard this will make them even harder.
[/quote]
Your explanations are vague and meaningless. Give me a straight answer involving entire nations.
Consider there are 3 people: John, Tom, & Xue. Xue lives in China. John and Tom live in the US.
John currently purchases widgets from Xue for $1/widget. Tom is currently unemployed but is willing to make widgets for $1.2/widget. If John purchases his widgets from Tom instead of Xue then John is $0.2/widget worse off. Xue is $1/widget worse off. And Tom is $1.2/widget better off.
Net benefit to the US of $1/widget. In fact the benefit to the US is likely much higher (because the employed are less likely to commit crime and less likely to use welfare).
When you extend comparative advantage to a nation you have to take into account unemployment.[/quote]
Jon is missing 0,2$ a widget that he would have otherwise made.
That he can no longer spend or invest, so economic growth is dampened.
More likely he will no longer use widgets or significantly less, because a cost increase of 20% is no small matter.
Tom and Xue can no longer afford whatever John makes with those widgets so they are both worse off or they cannot afford other goods produced by Tom, Dick or Harry.
The fact remains that buy buying more expensive than necessary you are burning money that necessarily must come fromn somehwere. Also, you are propping up industries that sooner or later will no longer be able to compete on the world market, see US steel industry.
The rest is the usual collectivist fallacy of assuming that there is such a thing as “the US” as an economic entity which can be lead ad absurdum quite easily, because it would lead to a world where everyone sows his own clothes and churns his own butter, after all, why buy American, why not buy Texan, or only in Houston or only from your family?