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TAKING ROBERTS TO TASK ON FREE TRADE AND TAXES
I was disappointed in Paul Craig Roberts' views on the trade policies of the Clinton Administration ("Why Clinton can't have free trade and higher taxes," Economic Viewpoint, Aug. 2).
He says, "Clinton is undermining a free-trade agreement by negotiating a privileged access to Japan's markets." Roberts suggests that managed trade and free trade are mutually exclusive positions, which is untrue. Clinton is simply pressuring Japan to open closed markets, which will serve to eliminate protectionist barriers and promote free, not privileged, trade.
I agree that the best-case scenario for the consumer would be no new taxes and lower trade barriers. I also agree that, in the short term, higher taxes domestically will not benefit our foreign trade partners, either.
However, opening markets in Japan and other foreign countries will stimulate U.S. business--and the economy--in the long run and will outweigh any short-term negative impact of tax increases.
Erik A. Scott
Paul Craig Roberts claims that Clinton's tax will hinder the economic recovery of Europe and Japan. His thesis is that with less disposable income in consumers' pockets [because of higher taxes], imports will fall, as will the demand for domestically produced goods.
The fact is that consumer demand is fueled by the middle class, which is by far the great mass of purchasers. This class is barely touched by the proposed new tax bills. The higher-income taxpayers will bear the burden of higher taxes. This group's great tax windfall since 1986 did not stimulate spending but spurred increases only in personal wealth.
Leonard H. Carter