Saturday, August 08, 2009

How Americans Spend Their Stimulus Dollars

I'm all for fairness in free trade, and I know protectionism caused problems during the Great Depression, and I don't want to see a rise in protectionism, and I've criticized the Buy American program before, but...

The Buy American program applies to US stimulus spending. That is money the US government is spending to stimulate the US economy. Why would they use it to stimulate other economies?

To put this in context, imagine not that the US stimulus was being spent on projects for Canadian firms... imagine it was being spent on Chinese imports.

Stimulus of the US economy will pull up everyone else, and Canada in particular, in any event.

At the least, I don't think this issue is as black and white as many are making out.



rww said...

What I do not understand is that every time someone suggests similar policies in Canada we are told we cannot do it because of NAFTA. But then again after the softwood lumber dispute it has become clear that NAFTA only applies to Canada, not the United States.

gta mls said...

Exactly. The Buy America program is for the US and should be used directly on the US economy, not others. However, it seems like stimulating the US economy does somehow indirectly stimulate economies of other countries too.


Ferd said...

The occasions when NAFTA works in our favour are not newsworthy; when it works against us, that's news. Maybe a little research is necessary before we conclude NAFTA doesn't apply to the United States.