Trade deficits are ALLWAYS economically detrimental to their nation.

myp · Apr 2, 2012

DodgeFB said:
That is true. It is a survival of the fittest thing. The sick, the old and the poor get left behind. I only have one problem with it. Most people don't want to be a drain on the world. But damn their hide they will ask you to live when there is nothing left to live for. There should be places where old farts like me turn themselves in to be put down with as much dignity as your local animal clinic puts down animals. That would save huge amounts of money. No Social Security or Medicare and Medicaid for those people.

It is not centrally a survival of the fittest thing unless you make it a survival of the fittest thing. When it comes to the old, we already have something of a social net with social security, etc. and the major shortcomings in jobs is likely a bigger hit on the middle-aged and younger peoples.

You bring up the point on end-of-life costs, but that is a whole other issue with a whole other moral aspect. Don't be so depressed though, cheer up and stay optimistic

DodgeFB · Apr 2, 2012

myp said:
You bring up the point on end-of-life costs, but that is a whole other issue. Don't be so depressed though, cheer up and stay optimistic

Me? Depressed? Surely you are kidding me!

dabdab · Apr 6, 2012

skeptic-f said:
How about talking about the elephant in the room. The big business interests and official Washington D.C. have worked together to promote globalization, which in some ways will probably raise incomes worldwide. What it has also done and is still doing is decreasing jobs in the USA because said jobs were relatively high paid for the skill level.

The reason we haven't felt the pain of this policy (a declining value of the dollar would serve to adjust the balance, just as a rising value of the yuan would also help to make the adjustment) is that we have traded shamelessly on the fact that the U.S. Dollar is the de facto world currency and have run up debt (including hidden debt in dollars and dollar instruments) in the world.

Thus, we have postponed the inevitable adjustment and thus it will be all the more painful when it does come about, like pulling an elastic band tight and then letting one end go again. That will be when we see what this nation and its citizens are truly made of.

there isn't any conspiracy here it is a srategy that back fired . even the us relation with china is a strategy that backfired. in the beginning euroup ande the united states wanted to open markets and and came up with the GATT (General Agreement on Tariffs and Trade) the sole purpose of wich is to limit countries ability to empose tarrifs on there imports and /or limiting imports by quotas. or subsidizing export . and they were successful in attracting many third world countries who hoped to have a piece of lucrative market without having to constantly negotiating for a quota , although many products are exempted from the agreement such as petrochemicals , petroleum, and agricultural subsidies .never the less it did not weather the test of time we all remember the steel war when president G.W.Bush slap the EU steel export with tariffs and it was about to become a trade war if not for china saving the day by asking the EU to send all the steel to china . a few month after that another similar incident happened between china and the EU around the textile imports from china when the WTO agreement kicked in and the EU ports were filled with imported textile . since they are not any more limited by quotas . and the EU was in an embarrassing situation for the EU textile manufacturers were protesting and pushing for blocking the imports , at the same time the EU retail stores owners are screaming there shelves are empty. china saved the day by agreeing to post pone the abandonment of quota .
at the time of the inception of the GATT , until it's morph into WTO the us and EU were in good position as far as manufacturing and exporting is concerned .but the rest of the world specially in Asia cached up fast and they (EU and US ) began to feel the heat of the competition specially in the international market , at the same time they began gradually to relay on the service sector and consumption economy . to column ate in the 2007 disastrous financial melt down .as for the dollar , after the bretton wood agreement the dollar began to be the defecto reserve currency cover since it was backed up by gold. but after vetname war it was obvious that the dollar is over valued and the US government wasn't able to back it up by gold and abandoned the convertibility to gold thus it became a 100% fiat money . but due to the sheer size of the American economy at that time it continued to be the major part of the SDR basket of currencies .but after the Mexican crises , it was suggested that they peg the peso to the dollar , to stop the spiral melt don of the currency. and thy did , and that halted the spiral immediately . when the same speculation invaded Asia every one pegged to the dollar and thus there is only on currency to day it is the dollar .the ones who are not pegged to the dollar are busy trying to keep a fixed value against the dollar .and the US is trying to press china to float it's currency and china is resisting . and mongering around these pressures .
As for the US - china relation , when president Nixon decided to open on china he was hoping to to capture a wider marked , a billion consumer market is mouth-watering market and it really worked for some time but now it is not any more . now china is main lender of the US who has a trade deficit with china . therefor china is calling the shots now.

dabdab · Apr 6, 2012

myp said:
skeptic-f, globalization was not some sort of conspiracy or strategy between big business and the government. It is the inevitable future of the world and it is glorious. It is the result of technological advancement that has brought the world closer together- the Internet, mass transport, mass communication, etc. not anything with big business interests.

Globalization furthers the power of trade and comparative advantages and we will all benefit from it- especially humanity as a whole. Sure some sectors and lower skilled labor in the US might take an ass-kicking, but that is only because people in other countries for the first time ever are getting the chance to compete with us. And anyway, in the long run, most unskilled labor is probably doomed to technological advancement (automation) anyway.

What we are seeing is merely a transformation, an evolution, of the economy and its benefits will be tremendous.

with all due respect Globalization never meant to benefit every one only to benefit those who have the ambition of controlling the other but it backfired .AS far as will being it will depend on the ability of a country to produce at least more than it consume this is the fact of economics since the recorded history regardless of the technology .What we are seeing is nether a transformation, nor an evolution what you are seeing is financial bubble bursting and taking every body with it what you are seeing is you are reaping the fruit of a toxic trickle down wall street fraudulent economics .

myp · Apr 6, 2012

dabdab said:
with all due respect Globalization never meant to benefit every one only to benefit those who have the ambition of controlling the other but it backfired .

What do you mean by "meant"? Again, it was not a pre-planned event so much as an inevitability. And again, it was not a conspiracy theory by anyone to control the others

dabdab said:
AS far as will being it will depend on the ability of a country to produce at least more than it consume this is the fact of economics since the recorded history regardless of the technology .

Not necessarily as you can still run short-term trade deficits and be okay or even potentially have greater long-term growth because of it (something Supposn gets wrong). This is especially true during a "recovery" state.

The other issue here is that if you are looking at the overall utility of all mankind, then the countries don't really matter so much.

dabdab said:
What we are seeing is nether a transformation, nor an evolution what you are seeing is financial bubble bursting and taking every body with it what you are seeing is you are reaping the fruit of a toxic trickle down wall street fraudulent economics .

How do you figure? Globalization has been happening for much longer than the recent financial bubble and the financial sector is not really the reason it is happening- we see it in virtually ever sector from telecommunications to manufacturing. And what "Wall St. economics" are you referring to?

dabdab · Apr 6, 2012

myp said:
What do you mean by "meant"? Again, it was not a pre-planned event so much as an inevitability. And again, it was not a conspiracy theory by anyone to control the others

I'm not talking about a conspiracy by anyone to control the others it was concentrated effort to make the world a one market with favorable conditions to those who breached it , yet they fail to abide by it . just like bretton wood agreement

Not necessarily as you can still run short-term trade deficits and be okay or even potentially have greater long-term growth because of it (something Supposn gets wrong). This is especially true during a "recovery" state.

The other issue here is that if you are looking at the overall utility of all mankind, then the countries don't really matter so much.

but you can't live for ever on borrowing and consuming ,you will endup broke , and the "the overall utility of all mankind" will not help you the world is not yet one country or one economy .

How do you figure? Globalization has been happening for much longer than the recent financial bubble and the financial sector is not really the reason it is happening- we see it in virtually ever sector from telecommunications to manufacturing. And what "Wall St. economics" are you referring to?

Globalization that has been happening is very deferant from Globalization that has been promoted by WTO or GATT .but the financial market melt down in the US will affect the hole world because finance is the most globalized . AS for "Wall St. economics" it is wall street financial product and it's bonzi sachems bult on fraudulent liers loans.

myp · Apr 8, 2012

dabdab said:
it was concentrated effort to make the world a one market with favorable conditions to those who breached it

That is what I was calling a conspiracy. And what I am saying is no, it was not a concentrated effort.

dabdab said:
but you can't live for ever on borrowing and consuming ,you will endup broke ,

Well first of all, trade deficits do not have to be paid for through borrowing- you can use savings for that. Also, trade deficits could potentially lead to greater growth (to the point where it outweighs even the trade deficit) than had that trade not occurred depending on the situation.

dabdab said:
and the "the overall utility of all mankind" will not help you the world is not yet one country or one economy .

Well, that's silly. We made these little colorful pieces of cloth and are now going to divide ourselves because of them? Also, I do not think increased utility (especially in less fortunate people) is a bad thing for me- in fact, over the long run, it is probably a very good thing. Oh and let's not forget that free trade does not happen without consent- the only reason we run the trade deficits in the first place is because the trader feels the transactions are increasing his utility (and that free trade often reduces prices for consumers).

dabdab said:
Globalization that has been happening is very deferant from Globalization that has been promoted by WTO or GATT .but the financial market melt down in the US will affect the hole world because finance is the most globalized . AS for "Wall St. economics" it is wall street financial product and it's bonzi sachems bult on fraudulent liers loans.

Sounds to me like you are just mad at something and haven't actually taken the time to look at this. Sure there are contagions in finance, but that isn't really anything new. There are a lot of upsides to interconnected markets and I'd say they heavily outweigh the negatives at this point.

dabdab · Apr 8, 2012

myp said:
That is what I was calling a conspiracy. And what I am saying is no, it was not a concentrated effort.

it is a fact weather you like it or not . agriculture and petrochemical and petroleum import are exempted from this agreement . that is in favor of some countries and not in favor of other country

Well first of all, trade deficits do not have to be paid for through borrowing- you can use savings for that. Also, trade deficits could potentially lead to greater growth (to the point where it outweighs even the trade deficit) than had that trade not occurred depending on the situation.

contenous trade deffecit is unattainable

Well, that's silly. We made these little colorful pieces of cloth and are now going to divide ourselves because of them? Also, I do not think increased utility (especially in less fortunate people) is a bad thing for me- in fact, over the long run, it is probably a very good thing. Oh and let's not forget that free trade does not happen without consent- the only reason we run the trade deficits in the first place is because the trader feels the transactions are increasing his utility (and that free trade often reduces prices for consumers).

silly or not some times you will be fighting and will kill and be killed . we do not divide our self over the cloth , we rally around it because we are divided . this is the case from the down of history tell today no thing new . as for trade deficit it can happened for countles reason good reasons and bad reasons . some times you have to temporarily some times you can't fight it and it break your back.

Sounds to me like you are just mad at something and haven't actually taken the time to look at this. Sure there are contagions in finance, but that isn't really anything new. There are a lot of upsides to interconnected markets and I'd say they heavily outweigh the negatives at this point.

I am mad because of those who lost every thing with no fault of there own, but because of the blunder of wall street bankesters who get bailed out to the tune of billions using taxpayer money .

myp · Jul 11, 2012

For anyone still wondering, YiLi Chien of the St. Louis Fed's take: http://www.stlouisfed.org/publications/re/articles/?id=2262

Supposn · Aug 11, 2012

myp said:
For anyone still wondering, YiLi Chien of the St. Louis Fed's take: http://www.stlouisfed.org/publications/re/articles/?id=2262

Excerpts from: http://www.stlouisfed.org/publications/re/articles/?id=2262

“YiLi Chien joined the Federal Reserve Bank of St. Louis as an economist earlier this year. His areas of interest are macroeconomics, household finance and asset pricing, asymmetric information, and dynamic contracting”……(he wrote):

…………”This (USA’s persistent trade) deficit must be financed either by reducing U.S. external assets or by increasing U.S. external liabilities. On balance, it seems possible that a persistent trade deficit would deplete U.S. overseas assets and perhaps, in the longer run, lead to insolvency.

……….. In sum, as long as the net investment income from the U.S. external account is sufficiently large, the trade deficit can be paid for and is not a major concern”.
////////////////////////////////////////

Apparently YiLi Chien’s greater interest and concern are for banking rather than wage earning households. USA’s global trade deficit has a leveraged affect upon our GDP. Trade deficits are detrimental to the GDP, and the median wage.

Net effect of a nation’s global trade products are reflected within the nation’s total GDP but prices of individual products are dependent upon the products producers’ costs.

Producer often receive reduced cost production support from non-profit entities. Governments often facilitate infrastructure and police security for producers at reduced costs. Similarly universities often provide research to for individual producers or their entire industries at reduced costs.
(The sum of net costs to both the producers of goods and the non-profit entities are fully reflected into the producing nations’ GDPs).

The total, rather than the understated value of USA’s trade deficit fully benefitted the exporting nations rather than the USA.

All economic differences between domestic and imported goods occur prior to the goods reaching a domestic producer’s shipping platform or a USA port of entry.

New Zealand lambs were nurtured, butchered, packed and shipped from New Zealand. USA’s purchasers helped pay New Zealand taxes, their roads, their schools, their veterinarian colleges’ research and development and many other of their enterprises’ overhead expenses. They gained knowledge and experience because they, (not us) were employed to perform all of those tasks.

Today we don’t produce goods; tomorrow we’ll be unable to produce goods?

Refer to the topic ”Reduce the trade deficit; increase GDP & median wage”, last posted to at 10:13 AM, August 3, 2012.

Respectfully, Supposn

myp · Aug 11, 2012

Supposn said:
Today we don’t produce goods; tomorrow we’ll be unable to produce goods?

Refer to the topic ”Reduce

Where did you get that myth from? Seen GDP figures and components any time in the past few years?

Road Warrior · Aug 11, 2012

myp said:
What do you mean by "meant"? Again, it was not a pre-planned event so much as an inevitability. And again, it was not a conspiracy theory by anyone to control the others

Agreed. It's a progression of capitalism. One can't fully support capitalism and democracy then turn around and support trade limits and suppression of businesses.

myp said:
Not necessarily as you can still run short-term trade deficits and be okay or even potentially have greater long-term growth because of it (something Supposn gets wrong). This is especially true during a "recovery" state.

Agreed. Saying we can't run a deficit is like telling every American they can't buy a house because going into debt is BAD. Sure we can run a deficit. The key is to be able to pay off that deficit in a bad situation. Those who bought houses they couldn't afford went underwater when housing went bust. We're borrowing $139 BILLION per MONTH from the Chinese just to keep our government solvent. That is B-A-D.

Running a deficit isn't bad, but spending beyond one's ability to pay is very, very bad.

Supposn · Aug 12, 2012

myp said:
......................Not necessarily as you can still run short-term trade deficits and be okay or even potentially have greater long-term growth because of it (something Supposn gets wrong). This is especially true during a "recovery" state..........................

MYP, we continue to experience annual trade deficits of goods every year for over a half century. They’re generally increasing. The only time their growth hesitates is when our economy is doing worse. At those times sales of both domestic and imported goods are slow within our domestic market places,

Trade deficits are ALWAYS (more than otherwise) detrimental to their nations’ GDPs and that detriment is immediate.

It’s conceivable that a nation must suffer a short term trade deficit simply to survive, (e.g. food, medicine or military equipment); they must then reconcile themselves to their lesser GDP and purchasing power of their median wage.

It’s conceivable that a nation could suffer a trade deficit due to the purchase tools and materials for promoting longer term growth; but in those cases they shouldn’t be suffering even medium term trade deficits. The USA has been suffering trade deficits of goods in excess of a half century and our trade deficits’ are due to consumer goods.

Respectfully, Supposn

myp · Aug 12, 2012

Supposn said:
It’s conceivable that a nation could suffer a trade deficit due to the purchase tools and materials for promoting longer term growth; but in those cases they shouldn’t be suffering even medium term trade deficits.

What about the scenario in which those tools or materials are not renewable? In other words, the tools or materials get used up quickly and more are always needed. I think that is the major consideration you are overlooking (along with all the data and studies).

Supposn · Aug 13, 2012

myp said:
What about the scenario in which those tools or materials are not renewable? In other words, the tools or materials get used up quickly and more are always needed. I think that is the major consideration you are overlooking (along with all the data and studies).

MYP, you’ve omitted a germane portion of the paragraph you quoted.
I wrote:
. It’s conceivable that a nation could suffer a trade deficit due to the purchase tools and materials for promoting longer term growth; but in those cases they shouldn’t be suffering even medium term trade deficits. The USA has been suffering trade deficits of goods in excess of a half century AND OUR TRADE DEFICITS’ ARE DUE TO CONSUIMER GOODS.

I’m a proponent of an Import Certificates trade policy. The market rather than government driven trade policy has no finite limit upon imports. It does require importers to surrender certificates covering the assessed values of goods they wish to bring into our nation. Certificates are issued only to exporters of U.S. goods (that choose to pay fees limited to defraying federal net direct expenditures due to this policy. All direct net expenses are ultimately borne by USA final purchasers of imported goods.

The government does not choose winners or losers but the policy caps our losses. We will not tolerate volumes of our assessed imports to exceed our assessed exports. There no finite limit upon USA’s imports.
Generally whatever tools and materials the USA might refrain from importing into the USA under this proposed policy, are unlikely to now being imported into the USA.

Respectfully, Supposn

myp · Aug 13, 2012

Supposn said:
MYP, you’ve omitted a germane portion of the paragraph you quoted.
I wrote:
. It’s conceivable that a nation could suffer a trade deficit due to the purchase tools and materials for promoting longer term growth; but in those cases they shouldn’t be suffering even medium term trade deficits. The USA has been suffering trade deficits of goods in excess of a half century AND OUR TRADE DEFICITS’ ARE DUE TO CONSUIMER GOODS.

I only responded to that point because that's the core point you are wrong on and as a result leads to you being wrong on the larger argument. But you didn't respond to my post. What if the tools are not renewable and you have to keep buying them?

Supposn · Aug 14, 2012

Originally Posted by Supposn

MYP, you’ve omitted a germane portion of the paragraph you quoted.
I wrote:
. It’s conceivable that a nation could suffer a trade deficit due to the purchase tools and materials for promoting longer term growth; but in those cases they shouldn’t be suffering even medium term trade deficits. The USA has been suffering trade deficits of goods in excess of a half century AND OUR TRADE DEFICITS’ ARE DUE TO CONSUIMER GOODS.

myp said:
I only responded to that point because that's the core point you are wrong on and as a result leads to you being wrong on the larger argument. But you didn't respond to my post. What if the tools are not renewable and you have to keep buying them?

MYP, my original post (including the sentence you omitted) provided the information that should have answered your question if you had referred to this discussions first message. In your case I assumed that you had read it.

Refer to: www.USA-Trade-Deficit.Blogspot.com and
http://en.wikipedia.org/wiki/Import_Certificates

or to the discussion thread of
“Reduce the trade deficit; increase GDP & median wage”

Last posted on 10:13 AM, August 3, 2012.

Within this discussion thread I oppose trade deficits because they’re detrimental to their nation’s GDPs and the purchasing powers of their median wage.

Within the other thread I advocate for a proposal that would eliminate the trade deficit of assessed goods aggregate total but does not choose particular winners or losers.

The proposal’s net expenses are borne by U.S. purchasers of imported goods. It’s a proportional rather than a finite restriction of USA’s aggregate imports. It does not prevent the importation of any specific type of goods. It’s also an indirect but effective subsidy of USA exports.

Respectfully, Supposn

Supposn · Aug 27, 2013

Annual trade deficits are always detrimental to their nation’s GDPs.

myp said:
Well first of all, trade deficits do not have to be paid for through borrowing- you can use savings for that. Also, trade deficits could potentially lead to greater growth (to the point where it outweighs even the trade deficit) than had that trade not occurred depending on the situation. ...

Well first of all annual trade deficits are always immediately detrimental to their nation’s GDPs.

Modifications of nations’ GDPs are reflected by their numbers of jobs and median wages. (The purchasing powers of nation’s median wages are prime indicators of their middle income earners’ living standards.

[If the trade deficit is due to the importing production supporting products, it could immediately or in time compensate for trade deficit’s detriment. That compensation could be a partial regain or a net gain of GDP. (That’s not USA’s case)].

For explanations of this google “ wikipedia, balance of trade “ and read the paragraphs entitled “Trade Balances' affects upon their nation’s GDP”.
For a proposed remedy google “wikipedia, import certificates “.

Respectfully, Supposn

Supposn · Aug 27, 2013

Road Warrior said:
... Saying we can't run a deficit is like telling every American they can't buy a house because going into debt is BAD. Sure we can run a deficit. The key is to be able to pay off that deficit in a bad situation. Those who bought houses they couldn't afford went underwater when housing went bust. We're borrowing $139 BILLION per MONTH from the Chinese just to keep our government solvent. That is B-A-D.

Running a deficit isn't bad, but spending beyond one's ability to pay is very, very bad.

Road Warrior, the economic price of our trade deficit is lesser than otherwise GDP, numbers of jobs and median wage.

Salary and wage earning families benefit as we all do from cheaper imported goods but it doesn’t compensate them for the detriment to the median wage.

If the U.S. Congress determines it is to our nation’s interest to practice a more altruistic trade policy, it should, (as the Marshall Plan was) funded by all taxpayers’ through our general federal budget. Its cost should not be primarily borne by those that earn the least.

Annual trade deficits are net economically detrimental and there costs are almost entirely borne only by those whose incomes are directly derived from employment.

Refer to the previous post #38.

Are you contending that we must continue to endure trade deficits detriment to our economy to induce China to continue to lend us the money so we can pay for our annual trade deficits’ detriment to our economy?

Respectfully, Supposn

Trade deficits are ALLWAYS economically detrimental to their nation.

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