Bluestone Development Systems

David Goldman, CNN Money.com staff writer, has posted an excellent article highlighting a long standing argument. Does it make sense to buy local or is it better for the economy to buy from the low cost producer?

Goldman’s article, “‘Buy American’-Sparks fly’ A stimulus provision that bans the purchase of foreign construction materials for public works projects gets jeers from economist and European trade interests.”, presents both sides of the argument.

Here are a few highlights:

• “The Buy American provision will stimulate our own economy,” Sen. Byron Dorgan, D-N.D., who wrote the provision, told CNN Money. “When tax payer dollars are used, we should urge that money to support the things produced here at home.”
• “It’s not a good time to initiate protectionist measures in any shape or form,” said Kurt Karl, head of economic research at Swiss Re. “It hurts growth because if you force one side to go with domestic production, only, then that precludes them from getting less expensive materials from overseas.”

Kurt Karl presents the economist’s viewpoint. Karl has extensive professional experience  and training to back-up his position. But old fashioned common sense might tell us that it’s better to buy locally produced products.

There is no doubt that this is both a technically complex and emotionally charged issue. The economy is a complex system. It seems obvious that consumers often make decisions based more on emotions than logic. But in this case, we are not talking about consumer decision making processes.

What do you think? Should the “Buy American” provision be passed, or are the economist correct that the provision will cause us even greater troubles?