The US trade relationship with China is one-sided and unfair, in favor of China.

Following is the Madison Plan to adjust US trade policy with China and level the playing field.

Phone call from the US president to the Chinese president….

“Hello, Red. This is Uncle Sam. We’ve been thinking a lot about foreign trade lately and we are tired of giving you a free ride. So, we have decided to impose an import tariff, effective tomorrow morning, of 50%. We chose 50% because that is about equal to our interest payment to you. So, you will actually be paying yourselves the interest we owe you while boosting our economy and re-stimulating our manufacturing base. Our unemployed factory workers thank you in advance.

No, please don’t cry, Red. I hate that! You see, we have to do it. We are losing our red, white, and blue asses over here and we are borrowing money from you that was profit you made from selling stuff to us which put our own manufacturers out of business. You have to admit, that’s stupid!

And, then there is the matter of over one trillion dollars that you owe American investors in the form of bonds that you defaulted on decades ago. You forgiving our debt to you and us paying the American investors you cheated decades ago seems the best solution at present. But, we can talk about that later. Have a wonderful day.

The Chinese have no choice but to do as we say or crush their own economy. The tariff alone will add nearly 2% to our GDP immediately. The most valuable thing on Earth is the American consumer market, and we have been giving it away for free to people who couldn’t give a rip about us! It is time to stop being stupid! We are in the driver’s seat. We control our own destiny. We can ensure a prosperous future for generations of Americans to come or we can maintain the status quo and transfer America’s wealth to the Chinese. I’m sure they will be grateful.

So I’m pining for the good old days when the future looked bright and opportunity was around every corner. When hard work meant prosperity. When Americans enjoyed the comfort of knowing that their children’s futures would be even more prosperous than their own. When the American Dream was still alive.

We can get back there. We must simply stop being stupid. With just a few simple actions we can right this ship and set it on a glorious course.

The Madison Plan involves two steps: Immediately impose across the board tariffs on Chinese imports and drastically cutting federal spending. Again, the most valuable thing in the history of Earth is the American consumer market. That cannot be emphasized enough. Charging importers (not just China) for access to our market is Step One in correcting this very serious problem.

We are pissing our wealth away by not using the American consumer market to our advantage. We owe the Chinese, the Japanese, and others, trillions of dollars which we have borrowed just to continue to feed the beast that is our federal government. If we continue on our present course, we will never be able to pay this money back, and every day we borrow more, billions more (scary numbers), while driving our own manufacturers out of business, victims of cheap offshore labor.


So how do we stop being stupid? The Madison Plan….

Step One – immediately impose an import tariff of 50%.

That means that the Chinese widget that previously retailed for $1.79 at Walmart will now cost $2.69, about 65 cents of which will go directly into the national treasury, not to feed the beast, but to reduce our tax burden. China (and our other creditors) will hate this idea as it will immediately make American manufacturing competitive again. The struggling American manufacturer of the same widget that retails for $2.49 will clean the Chinese clock.

Boom! Dynamic reversed with a simple presidential signature.

The American economy will promptly respond with renewed vigor and strength, which will benefit every economic sector from jobs to GDP to our tax base.

Under the current “stupid” system, we are transferring America’s wealth to the Chinese and Japanese, et al. at an alarming rate.

The most valuable thing on Earth, the American consumer market, is not on life support yet, but it is certainly ill. At the current stupid rate, in 20 years America will be the China of the 1960s and China will be the America of the 1960s. From an American perspective, that is stupid! We are in the driver’s seat. We do not have to transfer our wealth to anyone while jeopardizing our children’s futures.

Again, the most valuable thing on Earth is the American consumer market! We can’t forget that. It is the leverage we own to correct this disastrous inequity. Those foreigners who want access to the American consumer market must pay. We simply cannot give away the most valuable thing on Earth for free and to our own detriment.

Back in the day, the US government did not rely on taxes for its existence. It relied on tariffs. So important were these tariffs that we actually fought a civil war over them. I know, the Civil War was about slavery. No, it wasn’t! It was about tariffs. Slavery was Lincoln’s straw man, but that’s an article for another day. Actually, I have already written that article….

Step Two – take immediate steps to reduce federal spending. No plan to resolve our debt issue, be it tariffs, default, or something else, will be of any benefit if we don’t address the source of the problem. We MUST reduce federal spending!

I believe that we can shrink the size of government by at least 50% by abolishing many useless or redundant departments, agencies, and administrations. Many others can be shrunk to less bureaucratic, overreaching levels. Mitt Romney had a plan to shrink the federal government by attrition, no more hiring, allowing federal workers to work until they retire, not being replaced.

I believe our problem is more drastic than that, and drastic problems require drastic solutions. As can be seen by the following pie chart, there are many candidate departments/agencies for cutting or abolishing altogether in the federal government. It simply should not be difficult.


Another part of Step Two that I advocate is a constitutional amendment to cap federal spending as a percentage of GDP. The interest alone on our debt is over 6% of our budget (I know, what budget?), $248 billion a year, and growing, projected to be nearly $500 billion and 10% of the federal budget in 2020. That is stupid! We are paying over $800 per year per American just to service our debt. It is unnecessary and will continue to grow if we do not cut federal spending. If we don’t pay attention to what is happening in Europe, as those countries approach bankruptcy, then we will surely follow.

We can fix this. We simply have to stop being stupid!