ABBA - American Built & Buy America: Why the MAC is Required for Success

Question: Why have decades of "Buy American" campaigns failed to eliminate our trade deficits and restore the dynamism of American manufacturing?

Causes of Buy American's Failure to End US Trade Deficits

·  Americans tend not to Buy American unless Made-in- American products exist at prices that are reasonably competitive with imports.

·  American producers generally won't "Make in America" if Americans won't "Buy American."

·  Artificially cheap imports and over-priced American products undermine Buy-American campaigns -- even for very patriotic Americans.

·  Distorted exchange rates between the American dollar and foreign currencies make foreign currencies too cheap and the dollar too expensive.

·  Excessive global demand for dollars is the main cause of exchange rate distortions

Costs of Trade Deficits

·  Ballooning trade deficits. US merchandise trade deficits increased by 43 percent between 2016 and 2021 – clear proof of seriously distorted exchange rates.

·  "Hidden costs" of imports are very large:

·   Financial (firms)

·  Capacity underutilization, higher unit costs, lower profits, less investment & productivity.

·  Supply chain costs (transportation, interruptions and delays, IP theft, etc.).

·   Economic (economy)

·  Lost factories, supply chain dependency, slower growth.

·  Financial instability & crashes, government budget deficits, inflation, interest costs.

·  Debt & asset losses = theft from future generations (net foreign debt up 90% in 5 yrs).

·   Socio-Political

·  Lost jobs, family income, self-respect, and hope. Addiction and "Deaths of Despair;"

·  Destroyed communities in Rust Belt and rural areas; loss of national security;

·  Increased economic and political polarization (income distribution, class wars).

Cures for US Trade Deficits – Role of the MAC

·  Exchange rates between the dollar and foreign currencies must be moved to levels that will make our goods strongly competitive with those from China and other countries.  

· The Market Access Charge (MAC) is the best way to do this. It is a small charge paid only by those from abroad seeking to exploit America's financial markets. It will:

·  Gradually reduce excessive global demand for US dollars, allowing the dollar's exchange rates with foreign currencies to move towards trade-balancing exchange rates and, being linked to the US trade deficit's size, will keep US trade balanced indefinitely.

·  Generate $300-500 billion of new government revenues per year, paid by foreigners. This money can be used for priority programs such as improving infrastructure, strengthening national defense, and reducing the budget deficit.

·  Apply equally to all monetary inflows, thereby minimizing the risk of evasion, retaliation, and distortions while maximizing the MAC's contribution to America's competitiveness.

Success of American Built & Buy American initiatives depends on establishing fair, trade-balancing exchange rates between the American dollar and foreign currencies.

With the MAC, Americans will Buy American and Make in America because it makes sense -- financially as well as patriotically.

America Needs a Competitive Dollar - Now!