Article II. Section 2 of the Constitution gives the power to NEGOTIATE treaties to the President - which in 1986 was Reagan.

The Congress of 1986 was split - the Senate was controlled by Republicans by a 53/47 margin. The House was controlled by Democrats with a 253/182 majority. However, it was not ratified by this Congress.

It was signed in 1992 by George Bush, however the signing was cermonial, as negotiations were completed after Bill Clinton came to power.

So the real question is - who is RESPONSIBLE for the ratification?

NAFTA was ratified by the Senate 61-38. Senate supporters were 34 Republicans and 27 Democrats. It was later signed into law by President Clinton.

NAFTA is one of the biggest mistakes of the Reagan era - and the responsibility for it lays squarely on the Republican party. If you disagree, please use FACTS on how it came into existence to demonstrate how it is the fault of another group.

If we all agree it was a bad idea, I don't see any reason not to repeal NAFTA. Do you?

Add it to list of things for the new congress to accomplish. Unless it will be called racist.

Back on topic....inflation is on it's way. Like the Carter Administration, Obama doesn't know how to bring back an ailing economy which he wants to 'share the wealth' without hurting his country.

TTM - unfortunately not everyone agrees that it was a bad idea. Repealing it isn't as simple as repealing a US law, because it is now an international treaty. Abrogating it is alot more difficult, sad as it is.

What should be done is a restructuring of it, but there is no political will to do so.

That is if you agree that national sovereignty has no value. Repeal NAFTA and see how it goes. 200 years without NAFTA wasn't harmful as I read the history. And it could bring jobs back.

What damage?

I don't get all worked up about protective tariffs that exist pretty much just to make unions look more cost-effective.

Nafta and Cafta were / will be devestating to the American economy. I have a problem with the idea of "neo-conservatism" - its a false term. It should be called "faux-conservatism". Still, the term is accepted today.

How then is inflation on it's way? Can you explain to me the mechanism by which it's going to happen?

In order to have inflation, you have to have velocity (average rate at which $1 is spent). Where's the velocity? Are debt strapped consumers going to start spending? How could they when wages and credit are depressed? Are companies running at half capacity that are already sitting on gobs of cash going to start spending and hiring like crazy? Corporate R&D spending has declined for the first time in over 10 years. Are banks, again sitting on gobs of cash, going to start lending more? How can they when consumers FICO scores are in the toilet and 25% of homeowners are upside down? Are they going to lend to businesses? What business needs to expand when capacity utilization is just coming off 50 year lows?

I don't think you've thought this through.

Mookie - inflation is when an individual currency is devalued. Printing more money without anything additional to back it - means each individual dollar that is in circulation is worth fractionally less. You know this.

That is much of the reason for my pressing of the point. When forced to defend his opinion, one gets the clear impression that it is something that the OP formed about 15 minutes before posting it. Half-baked ideas are an annoyance for the 'opposition', and a menace for those in agreement.

Inflation is a sustained increase in the general level of prices. Your definition ignores velocity, which is an integral part of the quantity theory of money (MV=PY), which has become one of the most basic and unifying formulas in all of economics. "Inflation = increase in money supply" is an outdated and defunct definition and surely doesn't explain Third Man's assertion that we're going to need wheelbarrows of cash to purchase bread.

Mookie:

"In monetary economics, the quantity theory of money is the theory that money supply has a direct, proportional relationship with the price level."

http://en.wikipedia.org/wiki/Quantity_theory_of_money

"The quantity theory of money states that there is a direct relationship between the quantity of money in an economy and the level of prices of goods and services sold"
"Another way to understand this theory is to recognize that money is like any other commodity: increases in its supply decrease marginal value (the buying capacity of one unit of currency). So an increase in money supply causes prices to rise (inflation) as they compensate for the decrease in money’s marginal value."

http://www.investopedia.com/articles/05/010705.asp

Printing money to "buy" something - in this case injecting it into the stock market where it will change hands rapidly - aka your velocity argument (as investments, gains and losses will continually happen with it), will end up with a final result of 600 Billion more dollars with no backing being in circulation - thus lessening the real or percieved value of the dollar as it stands today. Lessen the worth of the dollar, and prices rise to compensate and equate to the old value of the goods. Thus, prices rise. Which equals inflation.

However, this amount alone would not trigger inflation or hyperinflation (which would be required to need wheelbarrows to by bread), but with the existent economic conditions as they are, it may be enough to trigger a round of inflation that was not expected.

Though exagerrating, I suspect this was the point the OP was attempting to make.

Exactly my point. Money supply size has a bearing on inflation, but it is not in and of itself inflation. You cannot have higher sustained levels of prices (inflation) without velocity. An increase in the money supply alone is not inflation. If they printed up a million tons of $100 bills and locked it away in a vault 100 miles underground, would you argue there was inflation? Would the very existence of that million tons of money have any bearing on the money in your wallet? Or the price of bread at the store? No, of course not. It's as if it doesn't exist. Or, think of it this way. Would the existence of gold on a planet a billion light years from Earth affect the price of gold here today? Without velocity, there cannot be inflation. Without access to money, there cannot be velocity. Without wage inflation or banks willing to loosen credit standards, there cannot be increased access to money.

Whoa, whoa, whoa, back the truck up. You misunderstand exactly what's happening here. The money is not being injected into the stock market. The Fed is buying Treasury securities from banks. That has the effect of injecting money into the banking system, not the stock market. The idea is that with more money, banks will be more willing to lend, as the credit system is how money is effectively "created". My question is how are banks going to get this money into the hands of consumers, when they're unwilling to lend and credit is in low demand or inaccessible? This is what's known as a liquidity trap. A liquidity trap occurs when there's a breakdown in the effectiveness of monetary policy. Adding more money to the system or lowering rates has no effectiveness on economic activity. This is what happened with the Bank of Japan in the 90's, and I think is what the danger is for our system today.

The Fed is indeed trying to trigger inflation. See Bernanke's rationale here:
http://www.washingtonpost.com/wp-dyn...110307372.html

There is little to no tariff protection left here in Australia. We let out Dollar float freely (up and down, it can be a wild ride!), there is free trade agreements with other countries (including the US and maybe in the future China).

We are having surpluses (helps when you have a lot of minerals in the ground that everyone wants), interest rates (4.75% Australian reserve bank [7.5 real world] and rising:-?) and an Aussie dollar that is worth more than the U.S.!

We know how it feels in the U.S., U.K and elsewhere (we've been there, done that and have the scars to prove it). I do hope that you can get yourselves out of the mess your in soon. It will take some time, some pain and both sides working together to get through.

Good Luck!

The Fed is monetizing the debt. In lay terms it means printing more greenbacks without the increased economic output. Which means each dollar is worth less. Inflation. Weimar. Look at the effect of raising M2 in any economy without an equal economic output.