Even Stupider

If housing stimulus is dumb, then the "Buy America" provisions in the stimulus bill are galactically stupid. This is idiotic, economically-ignorant, pandering bullshit of the Nth degree.

Let's count the ways in which this is so colossally retarded:
1) It's illegal.  We signed a whole bunch of really fancy treaties that say we won't do this.

2) It's useless. Trade deficits arise because we are less patient than other countries.  We would like to consume goods today, while they are willing to wait until tomorrow.  So they sell us the stuff today (a trade deficit), with the agreement that we'll pay them back with other stuff tomorrow (a trade surplus in the future).  We like to have stuff today rather than tomorrow.  If you say that the stimulus money has to be spent on U.S. goods, great.  We'll still have a trade deficit unless our savings behavior changes.

3) It's inefficient.  The reason that U.S. steel and concrete companies are struggling is because they suck at what they do.  They charge too much for their product, and so people buy their steel and concrete from the cheaper Chinese and Mexican firms.  If you buy only U.S. steel and concrete, you are literally burning up money.  Say we need 1,000 tons of steel to build a new bridge.  If we buy only U.S. steel, this will cost us $200,000.  If we buy Chinese steel, this will cost us $100,000, leaving $100,000 left over to buy other new things (like a school).

4) It'll backfire.  Companies in the U.S. sell a lot of stuff overseas.  I know we have a trade deficit, but we happen to export about $1.5 trillion worth of stuff every year.  If we pass this stupid rule, then you know what? Other countries will do the same thing, and our exports will collapse.  You know what happens when GE and Catepillar can't export anything?  They fire people.

Stupid, stupid, stupid, stupid, stupid.