The following is in response to Robert Huebscher’s article,Reflections on a Week in Cuba, which appeared last week:
Dear Editor,
The thought that Cuba has no ability to feed itself is sad. Cuba’s soil is some of the richest in the world. You can throw a seed over your shoulder and it will grow. The cattle industry was very big in Cuba prior to Castro wanting to cultivate a miniature cow for dairy and beef. Cuba has no legal system to enforce private property rights. Therefore there is no incentive to produce, so Cubans don’t.
Forget the embargo. There is no reason to do business in Cuba, just like there is no reason to do business in North Korea, Venezuela or any other place where there is no respect for private property.
The embargo should stay in place, or other countries will get the idea that you can steal U.S. assets and get away with it. It’s harsh, but other countries aren’t investing in Cuba because there is no way to protect their investment.
The lesson is that socialism destroys. Americans need to remember that, because where we are heading is destruction.
Frank J .Yong
The following is in response, to Bob Veres’ article,Why Deficits Don’t Matter, which appeared on October 29:
Dear Editor,
This article asks why shrinking budget deficits are bad news. I’m having trouble understanding this concept. Veres writes: ”As other economies sell their products to U.S. consumers, we import in excess of what American consumers buy. What does a smaller trade deficit imply for our potential economic growth?
I wonder how long it will take before this is debated in national forum.
Thank you!
Kevin P. Holland
Optimal Wealth & Investments, Inc.
Naperville, IL
Robert Huebscher responds on behalf of Bob Veres:
Kelton’s analysis is based on the flow-of-funds to and from the U.S. economy. In this regard, government spending represents inflows (money flowing into the economy). Our trade deficit and private sector- (household and corporate) deficits represent outflows. The inflows must equal the outflows.
Thus, a smaller government budget deficit implies that either the trade deficit must shrink (we must export more goods relative to imports) or private-sector deficits must shrink (households need to save more or corporations make less profits).
It is undesirable for households to decrease spending or for corporations to reduce profits. So, if we reduce our trade deficit, we must also reduce our budget deficit, which would slow economic growth. Government spending has a positive impact on GDP growth; of course, the size of that impact depends on how the money is spent.
