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Why the Trade Deficit Matters

PeteEU said:
VAT is one of the ways to prevent too much buying and hence lower the trade deficit.
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we value freedom here, we don't want Nazi elites telling us how much to buy. Trade deficit is caused when you make junk that people don't want to buy. the way to fix it is to make good stuff like the Germans do, and prevent Nazi govt from interfering.
 
PeteEU said:
So what is it when a handful of people own most of the wealth?
.
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its usually called socialism. Under capitalism Steve Jobs cant have $15 billion unless he distributes $100 billion in phones. Capitalism is amazing that way.
 
PeteEU said:
Yes.. or when you buy too many foreign products.
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you never buy too many foreign products!!!! people buy as long as it improves their standard of living, and Nazi govt should not interfere!!
 
Annual trade deficits indicate the nation has consumed more products than it has produced. The amount of a nation's net trade balance can only account for the prices of globally traded products effects upon their nations' GDP, but products' prices do not reflect all of the commercial activity their production has generated.

There are enterprises in industries that we would suppose our unrelated, but they generate commercial activity between them. (e.g. a coffee shop or a pizza parlor near a producer of goods, or a cartoonist that that provides content for that producer's in-house posters or company bulletins are two of many examples. All production supporting or other commercial activity induced by production, are not reflected within the prices of those products. Of course all domestic commercial production activity contributes to their nation's GDP but if it's not reflected within the prices of globally traded products, we cannot account for the ALL of global trades' net effects upon domestic production due to the nation's net balance of international trade; but it's always to a greater extent than the net balance itself.

Costs that contribute to their nations' domestic production, but are not fully paid for by the favored producers, and are not reflected in those producers' prices. To the extent that prices of globally traded goods are understated, they understate international trades' effects upon their nation's domestic production reflected by the annual GDP.

Similar to the iceberg that sank the Titanic, the great proportion of trade deficits' economic threat is hidden and its additional size cannot be approximated.

Respectfully, Supposn
 
I'm Supposn said:
Annual trade deficits indicate the nation has consumed more products than it has produced. The amount of a nation's net trade balance can only account for the prices of globally traded products effects upon their nations' GDP, but products' prices do not reflect all of the commercial activity their production has generated.
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it seems you and Trump care about deficits more than anyone! Do you love him?
 
James972 said:
it seems you and Trump care about deficits more than anyone! Do you love him?
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James972, No. I'm among the proponents of the improved trade policy concept as described in Wikipedia's “Import Certificates” article.
It's superior to free trade, tariffs, or any other trade policy we're aware of.

Google Wikipedia's article entitled “Import Certificates”.
Respectfully, Supposn
 
There is a lot of disagreement about the severity of the problem and the potential consequences:
The current pattern of international capital flows—should it persist—could prove counterproductive.​


We can run huge deficits for the time being, because foreigners— in particular, foreign governments— are willing to lend us huge sums. But one of these days the easy credit will come to an end, and the United States will have to start paying its way in the world economy.​


My view is that the trade deficit is not a problem in itself but is a symptom of a problem. The problem is low national saving. Given that national saving is low, I am not eager for the trade deficit to disappear, because that would mean that domestic investment would need to fall to the low level of national saving. But I do think it would be good if the trade deficit were to disappear accompanied by an increase in national saving.​


In addition to taking a look at a textbook on macroeconomics or international economics, here are some suggestions for sources of information about the topic:


 
Xelor said:
There is a lot of disagreement about the severity of the problem and the potential consequences:
The current pattern of international capital flows—should it persist—could prove counterproductive.​


We can run huge deficits for the time being, because foreigners— in particular, foreign governments— are willing to lend us huge sums. But one of these days the easy credit will come to an end, and the United States will have to start paying its way in the world economy.​


My view is that the trade deficit is not a problem in itself but is a symptom of a problem. The problem is low national saving. Given that national saving is low, I am not eager for the trade deficit to disappear, because that would mean that domestic investment would need to fall to the low level of national saving. But I do think it would be good if the trade deficit were to disappear accompanied by an increase in national saving.​


In addition to taking a look at a textbook on macroeconomics or international economics, here are some suggestions for sources of information about the topic:


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what on earth is your point?? Do you have any idea?
 
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