Posted by: mulrickillion | October 25, 2011

For a Serious Impact, Tax Chinese Assets in the United States

By Joseph E. Gagnon, Peterson Institute for International Economics

Op-ed in U.S. News & World Report. Reposted with permission.
October 13, 2011


China’s aggressive purchases of US and European assets hold up the values of the dollar and the euro in order to boost Chinese exports and dampen Chinese imports. This is a strategy that has been copied by many other developing economies, and the International Monetary Fund estimates that governments in these economies are spending about $1.2 trillion this year to hold their currencies down, about half of which is accounted for by China. US net exports are at least $400 billion lower than they would otherwise be, translating into 3 million or more lost jobs in the United States. The best course of action for the US government to take in response to China’s currency policy would be to tax the assets that China and other currency manipulators buy in the United States.

>> Read full op-ed
>> See also Flexible Exchange Rates for a Stable World Economy


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