Reduce the trade deficit; increase GDP & median wage

dabdab · Nov 17, 2011

myp said:
Well it isn't crap (it is the subjective theory of value) and you clearly misunderstand what the trade deficit is. Again. It isn't going to be the same exact materials being traded back and forth. Furthermore, on a net basis you are trading PAPER for TANGIBLE GOODS.

I have no objection on this theory of value my objection is on your explaining how the deficit is payed for by this theory asking you to save it for the supply and demand discussion , were it is relevant . alos reject your explanation that: "on a net basis you are trading PAPER for TANGIBLE GOODS", it's "MONEY for TANGIBLE GOODS" , the money being made of paper or nickel coins doesn't explain any thing here .

myp said:
You also disregard the fact that the imported goods might increase productivity so that NET production is potentially HIGHER than had it been without the deficit- to a point where the advantage is even greater than the irrelevant import-export gap.

Again that is an incorrect conclusion. the value increases the minute it arrive , if it is row material and is converted to a finished product the value increase many folds I even gave you an example on that just to steer you away from such an incorrect conclusion. but here you go dive to it head first .

myp said:
You said and I quote, "therefor I don't understand trade . sure some people will make money but who will lose money . sure someone will profit from gambling , but some will lose ."

can't you see that I sarcastically was repeating what you said about me
You said and I quote, "You really don't understand trade. Thank god that even the countries that you praise like Sweden understand and allow it more than you would. " even if you concluded from that that I don't understand trade that doesn't indicate a hate for trade

myp said:
I explained why a trade deficit isn't inherently a bad thing above.

you did not explain any thing you only insisted on stating a trade deficit isn't inherently a bad thing . which I challenged you for. show me just one country that continuously ran a trade deficit and prospered you always have to pay as a country for it by exporting or borrowing .

myp said:
Production and trade has speculation in it and it is SUBJECTIVE. Some investments fail, others don't- no one knows for sure to begin with which will go which way. CDOs also aren't inherently bad- I am sure you are fine with trading mortgages, so that was another way.

also aren't inherently good for the economy or the country , show me any positive effect other than employing good talents to create nothing and generating profits for nothing for the banks that on itself a nonproductive activity if you add to it the resources and the costs and the bubbles it is poison .
has these resources and the costs been invested in producing real tangible goods and service you wont be borrowing from every were and suffering the unemployment .there is almost nothing that always good or always bad but you have to compare advantages with disadvantages , and go with the advantages if grater and steer away from were disadvantages are greater .
And I'm fine with trading mortgages as a money for goods and services but not for cash .And CDO has nothing to do with mortgages . CDO is s structured asset-backed security . when you buy a CDO you don't know at any time what you are buying in to weather you are buying AAA ,BBB or no label security certificate. But if you are selling your car or horse or house for a mortgage you know you sold it for money that will be payed in the future and guaranteed by the Collateral .

myp · Nov 17, 2011

You are not differentiating the correlative characteristics of certain historical situations (most of which have opposite correlative historical examples as well) with the inherent properties of trade, value, deficits, and CDOs. Correlation does not prove causation. If you can't understand that, I am not going to waste my time here. I suggest you go read more about logic, the scientific method, and empiricism followed by some of the academic studies in economics.

dabdab · Nov 17, 2011

myp said:
You are not differentiating the correlative characteristics of certain historical situations (most of which have opposite correlative historical examples as well) with the inherent properties of trade, value, deficits, and CDOs. Correlation does not prove causation. If you can't understand that, I am not going to waste my time here. I suggest you go read more about logic, the scientific method, and empiricism followed by some of the academic studies in economics.

I wasn't talking about correlations or causation of any thing . that is your assumption . I challanged you on tow points . A: how The USA is paying for it (the deficit) since it is there since 1985 and . B: show me just one country that continuously ran a trade deficit and prospered . you could not come up with an answer .and if you do not respond , I don't care . I have you now inside out ( metaphorically ) .

myp · Nov 17, 2011

dabdab said:
I wasn't talking about correlations or causation of any thing . that is your assumption . I challanged you on tow points . A: how The USA is paying for it (the deficit) since it is there since 1985 and . B: show me just one country that continuously ran a trade deficit and prospered . you could not come up with an answer .and if you do not respond , I don't care . I have you now inside out ( metaphorically ) .

How the USA has been paying for it- money.

And asking me for an example of perennial deficits with prosperity is by definition looking at it in terms of correlation. Either way, our discussion is about trade deficits in general, not perennial deficits, but even then I'll go ahead and say the US. Oh and yes we spend money on goods but what is money more than a store of value in paper form. It is meant to be used to buy things when needed.

dabdab · Nov 17, 2011

how does the USA get the money to pay for this deficit ? . if the trade deficit is not inherently a bad thing , why can't you name one country that continuously ran a trade deficit and prospered ? . But we are progressing !. now you identified the money for what it is or what it supposed to be "money is a store of value " the " paper form" part isn't important and will disappear some day what the trade deficit really is a deficit of value , and if you continue losing stored value continuously you will simply deplete your wealth even if you export garbage for a good price and you import raw material for a cheap price and turn it in to products that are of value many fold unless you manage to export some of it to replenish your "stored value". you wil run out of stored value then what ?you want my answer ? . It is not a mere correlation . But the the lack of correlation is enough evident to the validity of your claim that a trade deficit isn't inherently a bad thing . So go get one if you can .

myp · Nov 17, 2011

dabdab said:
how does the USA get the money to pay for this deficit? if the trade deficit is not inherently a bad thing , why can't you name one country that continuously ran a trade deficit and prospered ? . But we are progressing !. now you identified the money for what it is or what it supposed to be "money is a store of value " the " paper form" part isn't important and will disappear some day what the trade deficit really is a deficit of value , and if you continue losing stored value continuously you will simply deplete your wealth even if you export garbage for a good price and you import raw material for a cheap price and turn it in to products that are of value many fold unless you manage to export some of it to replenish your "stored value". you wil run out of stored value then what ?you want my answer ? . It is not a mere correlation . But the the lack of correlation is enough evident to the validity of your claim that a trade deficit isn't inherently a bad thing . So go get one if you can .

It is absolutely a correlation (by definition) and the fact that you can't accept that shows me and anyone reading this that you don't actually care about intellectual integrity in your argument, but would rather just keep shoving your unjustified OPINIONS down other people's throats.

Anyway, yes money is a store of value, but a trade deficit is not a deficit in value. Why? Because YOU GET STUFF BACK. Since all purchases come because the buyer values the purchased item more, the value held actually INCREASES as is the case with ANY TRADE, deficit or not, at least in the short term. Going to the long run, it could potentially stay that way, but perhaps not, but in either instance, a person's expectations and value calculation changes based on that. All that aside, a trade deficit can also lead to more production than without one. Consider a country that has no oil in its domestic land. Without oil it would likely not be able to do much, but even if it is paying for it at a deficit, the net benefit might be much greater even in terms of money if that oil stimulates other economies and other production.

dabdab · Nov 18, 2011

Just name one country that that continuously ran a trade deficit and prospered.
when you export you will an amount of money and when you import you pay an amount of money if the proceeds of your export is grater than your expenditure continuously , there has to be a way for you produce the extra money , remember it is "a stored value " in both ways what value that chainge is the value of the product being imported or exported , expressed by money .
So if you are a wise country when you see the depletion of stored value you simply cut on importing and prioritise and export more .
but if you are like America you will use the credit card . that will catch up with you some day . and the day that they will fail to find a lending bank is not that far .

myp · Nov 18, 2011

dabdab said:
Just name one country that that continuously ran a trade deficit and prospered.

It is correlationary. How can you not understand that? Fine you want a country that's ran a trade deficit and is prosperous? The United States. You know, one of the richest countries in the world and to this day one of the biggest producers per capita?

dabdab said:
when you export you will an amount of money and when you import you pay an amount of money if the proceeds of your export is grater than your expenditure continuously , there has to be a way for you produce the extra money , remember it is "a stored value " in both ways what value that chainge is the value of the product being imported or exported , expressed by money .
So if you are a wise country when you see the depletion of stored value you simply cut on importing and prioritise and export more .
but if you are like America you will use the credit card . that will catch up with you some day . and the day that they will fail to find a lending bank is not that far .

IT IS NOT A DEPLETION OF VALUE. THE GOODS IMPORTED ARE VALUED MORE THAN THE MONEY SPENT FOR IT WHICH IS WHY THE TRADE HAPPENS IN THE FIRST PLACE. Do you not understand that? The only case that you might have is against long-term perennial trade deficits, but even there it is arguable. You know so little about the topic though that you don't even realize that. Oh and trade deficits do not inherently have anything to do with "credit cards" so I don't even know why you are bringing that up.

dabdab · Nov 18, 2011

you are right it is not a depletion of value as such , rather meaning your reservoir of stored value will be empty and the value you exchanged it for will be consumed if not consumed already . the credit card is just a metaphor of debt or were you will get new money unless ..... you print your money out of then air then you will .
As to long term or short term trade deficit all I was talking about is when I say "country that continuously ran a trade deficit and prospered" it is long term is it not ? .
as for the prosperity of the USA , maybe we understand the word differently prospered man or country in my book is the one who is growing his wealth . as apposed to the one who is depleting it regardless of the size or life style . there for in my book it is not . as for the USA in term of gdp it ranks 12 now , it used to be # 1 on every thing .so the net result : trade deficit is bad for the economy , trade surplus is good for the economy .AND THAT WAS THE HOLE SUBJECT OF THIS THREAD .

myp · Nov 18, 2011

dabdab said:
you are right it is not a depletion of value as such , rather meaning your reservoir of stored value will be empty and the value you exchanged it for will be consumed if not consumed already . the credit card is just a metaphor of debt or were you will get new money unless ..... you print your money out of then air then you will .

Except the trade deficit could potentially lead to an increase in the reservoir which is what you aren't grasping. Take the oil example I gave above.

dabdab said:
as for the prosperity of the USA , maybe we understand the word differently prospered man or country in my book is the one who is growing his wealth . as apposed to the one who is depleting it regardless of the size or life style .

A trade deficit does not mean depleting wealth.

dabdab said:
there for in my book it is not . as for of the USA in term of gdp it ranks 12 now , it used to be # 1 on every thing .so the net result : trade deficit is bad for the economy , trade surplus is good for the economy .AND THAT WAS THE HOLE SUBJECT OF THIS THREAD .

That is correlationary. By definition. You can't draw a causal conclusion like "trade deficits are bad because x number changed for the US when it had a trade deficit when y,z,w,u,etc. all changed too." Again, please learn about empiricism and causation vs. correlation.

Oh and the US still is number 1 in GDP, not sure where you are getting 12 from.

dabdab · Nov 18, 2011

myp said:
Except the trade deficit could potentially lead to an increase in the reservoir which is what you aren't grasping. Take the oil example I gave above.

A trade deficit does not mean depleting wealth.

That is correlationary. By definition. You can't draw a causal conclusion like "trade deficits are bad because x number changed for the US when it had a trade deficit when y,z,w,u,etc. all changed too." Again, please learn about empiricism and causation vs. correlation.

Oh and the US still is number 1 in GDP, not sure where you are getting 12 from.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
In term of GDP growth rate the USA rank #169
AS to your advice to learn about empiricism and causation vs. correlation I thank you very much for the advice and I promise to try .

myp · Nov 18, 2011

dabdab said:
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)_per_capita
In term of GDP growth rate the USA rank #169
AS to your advice to learn about empiricism and causation vs. correlation I thank you very much for the advice and I promise to try .

GDP is a better measure of prosperity than GDP growth rate, though both aren't that great and overrated. The reason GDP growth rate doesn't matter as much is because it is just change in GDP- countries experiencing agricultural, industrial, digital, or other such "revolutions" will clearly have an advantage. Take the extreme example of a hypothetical brand new country that has no production at all and no prior GDP- the first year regardless of what it produces, it will have GDP growth that is undefinable- arguably infinity. That doesn't mean anything though because its relative to having nothing at all.

dabdab · Nov 18, 2011

I do agree with you in both accounts although my reason for dismising the GDP is component does not really reflect prosperity rather it reflect size or the mass of the economy .

Supposn · Jan 5, 2012

(Median wage) / (GDP per person)

dabdab said:
I do agree with you in both accounts although my reason for dismising the GDP is component does not really reflect prosperity rather it reflect size or the mass of the economy .

Dabdab, although GDP, (even GDP per capita) does not indicate prosperity with certainty,
it certainly is a strong indication of prosperity.

GDP per capita bolsters the median wage.

A higher ratio of median wage compared to per capita GDP is certainly an indication of prosperity.

Due to a trade deficit, the nation’s GDP will ALWAYS be less,
and due to a trade surplus the GDP will ALWAYS be more than otherwise.

Respectfully, Supposn

Supposn · Jan 5, 2012

This proposal will not tolerate U.S. assessed imports from exceeding our assessed exports of goods.

It limits our import ratios to our exports does not cap any amounts; there’s no limits to U.S. exports.

This limits the effect of any mischievous activity contrary to our national interests.

The limitation of harm is pertinent to the many posts in this thread that are in regard to changing U.S. dollar’s exchange rates.

Respectfully, Supposn

Supposn · Feb 28, 2012

President Obama said “tax deduction” and “manufacturing”.

President Obama said “tax deduction” and “manufacturing”.
The president Obama has alluded to a tax reduction favoring manufacturing.
I can’t comment explicitly upon a proposal that has yet to be published, but I can address the two terms “tax deduction” and “manufacturing”.

With regard to a stimulus tax reduction, too often tax bills drafted to accomplish other than financial purposes fail to accomplish their goals or they succeed at unjustifiable expense.
We would limit a tax stimulus to manufacturing if its method’s only suitable to manufacturing or if its cost/benefit is questionable.

I expect this proposal to be superior to a tax consideration for manufacturers.
It would be of advantage to any U.S. enterprise competing or aspiring to compete with foreign goods within or beyond our borders.
It is of no net government expense. All net expenses are borne by U.S. purchasers of imported goods.

Respectfully, Supposn

myp · Feb 28, 2012

I hadn't heard of this before now, but cutting taxes randomly by sector is hardly the best way to go even if it might in some instances help. We need broader reform than this. Distorting sector v. sector taxes too much will only leads to certain sectors relabeling themselves.

Supposn · Mar 6, 2012

Creating additional problems

myp said:
I hadn't heard of this before now, but cutting taxes randomly by sector is hardly the best way to go even if it might in some instances help. We need broader reform than this. Distorting sector v. sector taxes too much will only leads to certain sectors relabeling themselves.

MYP, we’re in agreement?
Legislation driven by expediency and just getting something passed generally result in bad legislation. Too often what’s passed fails to remedy or alleviate the problem at hand and additionally often exacerbates our problems and/or introduce new unanticipated or evokes problems we knowingly risked.

Respectfully, Supposn

Supposn · Aug 3, 2012

myp said:
I hadn't heard of this before now, but cutting taxes randomly by sector is hardly the best way to go even if it might in some instances help. We need broader reform than this. Distorting sector v. sector taxes too much will only leads to certain sectors relabeling themselves.

MYP, neither the trade deficit problem or the propose Import Certificate remedy are taxes.
This problem is not as economically critical as balancing our federal budget.
Congress cannot agree upon increasing or decreasing which taxes or government services.
The leadership of both parties demonstrate no serious interest in USA’s global trade.
We are not enjoying an era of political good will and negotiated compromises.

With the exception of Libertarians, from left to right over the entire political spectrum, I sense within the remaining population there’s dissatisfaction with our policy of seeking absolutely pure free trade.

This market driven proposal is not a tax, requires no net government expenditures. It will certainly reduce USA’s trade deficit of good and is an indirect and effective subsidy of USA’s exported goods. This would in turn increase USA’s jobs and median wage.

Respectfully, Supposn

Andrew Taggart · Nov 20, 2012

Rather than wondering whether deficits are good or not, we really need to get away from targeting GDP. Rising GDP doesn't seem to result in rising GDP per head, which is presumably a better starting point than low GDP per head when deciding who gets what when. The government should be targeted on GDP per head - perhaps by setting MP/congressmen's pay rises on the increase in GDP per head?

The only danger to avoid is attempts at lower the population for the same level of GDP.

Reduce the trade deficit; increase GDP & median wage

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