Originally Posted by Villages Kahuna

Is China "manipulating" it's currency? Sure. But so does the U.S. What do you think happens when the Treasury does things like "quantitative easing"? That's a synonym for printing money. When the Treasury increases the money supply prices inflate and the value of he dollar decreases. As far as China is concerned, their loans to us are being repaid with dollars worth less than the dollars they loaned us. That 's enough to aggravate any lender.

At the same time, China manages its currency in order to keep it's economy and employment on a steady growth trend. By the way, based on the economic results of the last couple of quarters whatever they're doing hasn't worked. Their economic growth has slowed to a snail's pace. That's the same reason our Fed does quantitative easing, but it hasn't worked too well because our economy is far bigger and was in far worse trouble as the result of the housing crisis than China's was.

But basically, no one with any knowledge of how economics and foreign trade works will pay much attention to what Romney says he'll do, because there's little he can do. China is by far our biggest trading partner. I'm pretty sure they buy more from us than we buy from them. So what "trade sanctions" will Romney impose that wouldn't be met immediately by the Chinese against us? Sure, Romney could put a 25% duty on most of the stuff sold at WalMart and every iPad or Apple computer imported from China--those would be a politically popular moves, wouldn't they? Then the Chinese would put a comparable duty on all the stuff they import from us, causing widespread damage and increased unemployment in our economy...a move that would also be very politically unpopular.

So stuff like Romney said, or Donald Trump before him, is designed to attract and incite voters who don't know any better. Just like lots of the other stuff said on the campaign stump. At the end of the day, there's only one good way to sustain acceptable economic growth--spend less on government than we're taking in taxes. Until we do that, all this other stuff the politicians talk about are band-aids, campaign rhetoric. That includes everything from government regulation, tax policy, the inefficiency of government spending--all that stuff. It's not that thse things aren't important, they are. It's just that they're not the root problem, the problem the politicians won't talk about.

In the end, our budget will have to be balanced by dramatically cutting entitlements, reducing defense spending and raising tax revenues. Until the politicians start talking about those things, all the conversation about stuff like trade sanctions is little more than conversation designed to incite voters to elect one candidate or the other. They're not ideas that can be taken seriously.