Paper Summary:

This paper focuses on the "Buy American" concept and its place in the economic crisis, as well as its effects on public finance policy. The paper explains that a similar measure was taken in 1929, the year the Great Economic Depression commenced; the U.S. imposed trade barriers for importers, but soon so did the other countries, and the U.S. trade balance suffered deeply as they were no longer able to support their export operations. The paper asserts that two principal problems exist with the "Buy American" concept - the economic crisis, and the proposition to stimulate the national industry to the detriment of the foreign manufacturers; the second is generated by the first and it is considered a solution, but in fact, it is a generator of additional problems. The paper concludes that excessive focus on the "Made in America" brand is actually a protectionist measure, which fosters the creation of an enclosed economy.

Outline:

Introduction and the Event
The Sources
Key Economic Concepts
Analysis with the PACED Decision-Making Model
Problem
Alternative Solutions
Evaluation of Alternatives
Decision
Public Policy Implications
Predictions
References

From the Paper:

"Based on the previous stages of the PACED decision-making tool, the final decision revolves around the implementation of the second alternative. Aside the fact that it does not generate immediate results, it presents only benefits. It is also natural for the resolution to an economic crisis to not be achieved over night. In addition, to also help the population and the economic system on the short term, other strategies could be developed and combined. They could refer to a reduction in the VAT for a limited period and for the subsistence products or the reduction in taxes when purchasing a new American car, also for a limited period of time, say one year."

Sample of Sources Used:

• January 29, 2009, Buying American, The Economist, last accessed on February 5, 2009
• Steps in the P.A.C.E.D. Model, The Gus A. Stavros Center for Free Enterprise and Economic Education http://stavros.coedu.usf.edu/EconomicLiteracy/sld019.htm last accessed on February 5, 2009

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