The IUSB Vision Weblog

The way to crush the middle class is to grind them between the millstones of taxation and inflation. – Vladimir Lenin

U.S. Government stops buying American made condoms. 300 out of work. – A lesson in basic economics.

Posted by iusbvision on March 24, 2009

Capital and money goes where it is treated well and this is as good of an example of this simple economic lesson the left fails to understand as any.

China sells the condom for 2 cents while we have to sell if at 5 cents. So I pose this question to the anti-business, “punish the rich (and by rich they mean the producer” left. If this company didn’t have to pay a whopping 35% corporate income tax, not to mention the cost of excessive regulations, how much could they sell the condoms for? Three cents maybe… and the government would get some of that money back in tax revenue.

The left often denies that raising tax rates results in lower government revenue. Well here is a company and 300 citizens that the government wont be getting a dime from and will likely now need government assistance.

China has no capital gains tax, ours is 20% and you wonder why everything seems to be made over there and we have growing unemployment. Think about it.

Kansas City Star:

At a time when the federal government is spending billions of stimulus dollars to stem the tide of U.S. layoffs, should that same government put even more Americans out of work by buying cheaper foreign products?

In this case, Chinese condoms.

That’s the dilemma for the folks at the U.S. Agency for International Development, which has distributed an estimated 10 billion U.S.-made AIDS-preventing condoms in poor countries around the world.

But not anymore.

In a move expected to cost 300 American jobs, the government is switching to cheaper off-shore condoms, including some made in China.

The switch comes despite implied assurances over the years that the agency would continue to buy American whenever possible.

“Of course, we considered how many U.S. jobs would be affected by this move,” said a USAID official who spoke on the condition that he would not be named. But he said the reasons for the change included lower prices (2 cents versus more than 5 cents for U.S.-made condoms) and the fact that Congress dropped “buy American language” in a recent appropriations bill.

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