Class Discussion Questions - Essay Example

#2 It is hard to argue with the fact that the government imposing a tariff would result in a greater amount of revenue going into the government. But in terms of producers and thinking of whether they gain or lose from a tariff, it is a more complicated question. On the one hand, producers in a domestic sense would be protected by the tariff, and thus gain stability within an internal domestic market. However, there would be negative repercussions for competition on a global market, and this is an increasingly global world of free trade opportunity and speed.

Overall, producers have more to gain than to lose from limited tariffs, because ultimately, the producers are not going to have as much competition. #3 Chad mentioned that tariffs could hurt the US economy, and I agree. I also agree that in history, the Smoot-Hawley Tariff of 1930, an excessive form of licensed protectionism for the US market, actually did the opposite of what it was supposed to do, which was end the crisis of the Great Depression. These factors point towards the phenomenon of bubble and crash, and particularly the stock market crash that led to the Great Depression.

“The concept of buying now and paying later was quickly adopted and by 1929, 60% of all cars and 80% of all radios were bought on installment credit. By 1929, 80% of Americans had no savings at all. Between 1925 and 1929 the total amount of outstanding installment credit increased from $1.38 billion to over $3 billion” (Shepherd, 2003). However, it is fairly safe to say that people have learned from the mistakes of this time period. Learning from this disaster means that banks are fairly safe places for our money, as they are highly regulated, but they are not completely fail-safe or fool-proof.

It may be better and safer to have a savings account collecting interest than to have the money under the mattress generally, but during specific