You want money to build manufacturing (which is mainly what we're talking about here)? Easy. Tax the hell out of companies that use foreign outsourcing
Its not a bad idea generaly. Sure, encourage local markets and get back to the smaller sustainable microeconomies inside nations. First thing striking as unrealistic is that the elites ruling this world are rolling the globalisation scenario and won't go back with it until they satisfy some global domination goal they have. But lets not care about those for a moment.
Economy is wobbling and falling on its knees. No, seriously, do you believe in this miracle recovery we saw an indication of in the markets for the last several months? Job market sucks, real estate bubble is deflating. They already mess with the system trying to patch it here and patch it there, print some more money and hope for the best. We can be certain that changing some of the policies drasticaly is very risky bussiness right now. Like suddenly abandoning trade deficits. They can make some progress reducing it with China now perhaps more open to start manufacturing goods for their own people. But it certainly won't happen overnight.
I see world economies struggling for the next couple of years. The governments on the verge of bankrupcy will tax the hell out of people, bet on it. But its questionable to what degree will they punish foreign outsourcing practices. I guess all the taxing will just be a direct need to raise some money to survive. Life will be thougher for common folks, food is going to be expensive. And now you suggest to tax the goold old cheapo china goods heavily. The prices will skyrocket. Don't forget all the money printed that will eventually find its way out and could cause massive inflation as well. Keep in mind that the important changes has to be gradual, and that takes time. The balance of the world markets might be more complicated than you think
Another thing to consider is the response to such higher taxes from China. They might not like it.
I agree with you on that China selling dollars thing. Its true that they must do it the smart way. Like buying up commodities and companies producing them - like miners. They are already doing that. But I don't think that the US should not be worried that China is getting rid of the dollars as you call it not-cheaply, its the other way around. In this way they can accumulate wealth with still valuable dollars.
But yes, what do I know. I follow these events and speculations as a personal hobbie. Thanks for your response anyway
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