Why Does the US Always Run a Trade Deficit? (newyorkfed.org)
- Reference: 0177678343
- News link: https://news.slashdot.org/story/25/05/21/184249/why-does-the-us-always-run-a-trade-deficit
- Source link: https://libertystreeteconomics.newyorkfed.org/2025/05/why-does-the-u-s-always-run-a-trade-deficit/
This macroeconomic reality means targeting specific trade categories won't resolve the overall imbalance -- even when the petroleum deficit disappeared by 2019 due to increased domestic production, the total trade deficit grew to $441 billion, consistent with a widening saving gap.
Bureau of Economic Analysis data reveals household saving has remained below pre-pandemic levels as consumers spend down accumulated savings from 2020-21, while business saving has remained relatively stable. Reducing the deficit would require significant macroeconomic adjustments, including higher domestic saving or reduced investment spending, which studies indicate would likely cause economic pain as demonstrated during the 2008 recession.
[1] https://libertystreeteconomics.newyorkfed.org/2025/05/why-does-the-u-s-always-run-a-trade-deficit/
USD world's reserve currency ... (Score:4, Interesting)
The USD is the world reserve currency. It basically impossible to be the reserve currency and not run deficits. If the US wants to get rid of its deficits, it needs to get rid of it's reserve currency status. But good luck being able to fund its wars and military industrial complex.
Re: (Score:2)
That status is slowly going down though. Still absolutely the largest reserve but... shit can happen.
Re: (Score:2)
Still will happen. The US has long since guareded that status with extreme effort (That invasion in Irak? Irak switched to the Euro for its oil trades ...), but I think Trump is wayyy to dumb to even undertsand the idea.
With all that instability the dumb orange "fascist child" is doing, the USD is done for. And it is not comming back anytime soon. Maybe next century. Or not.
Re: (Score:2)
> That invasion in Irak? Irak switched to the Euro for its oil trades
And somebody ended up swinging from the gallows for that effort.
Re: (Score:2)
This life would have been preferable, but I'll settle for the next and the history books containing an accurate assessment.
Re: (Score:2)
> the USD is done for.
You really are an idiot. And you claim to teach people? Fucking horrifying.
Re: (Score:2)
Sadly this is exactly what Trump is leading us to -- ending what economists call the dollar's exorbitant privilege. Trump is destroying the value of the dollar and it is on the path to more equally sharing reserve currency status with the euro. Right now for every euro held in reserve around the world there are three dollars held in reserve. This ratio could be much closer to 1: 1.3 by the end of Trump's presidency. As we pay higher and higher interest rates on our national debt, Europe is going to be ab
Increased Domestic Savings– (Score:2)
means less purchasing; i.e. slowing of consumer economy?
no mention of the Triffin dillemma? (Score:1)
The USD is pretty much still the world reserve currency. If you stop running a trade and fiscal deficit, all those eurodollar loans would start to blow up as there aren't enough dollars around to repay them. First you'd see foreig banks dump all their USD denominated assets if this would play out, desperate to get their hand on any dollar...
Re: (Score:2)
BINGO! If you want to see what the US fiscal balance would look like without Triffin, look north at the loonie and adjust X/M down. Not pretty and yet even it leans on the USD (as a proxy).
Re: (Score:2)
Not "pretty much"- "absolutely undeniably so".
After the USD comes the Euro, at roughly 1/3rd the amount.
1/10th is everything else.
Whoops All Arrowheads (Score:3)
That there exist economic imbalances is the whole point of trade, if you think about it.
We could bring back the middle class (Score:5, Insightful)
It seems simple, tax the rich and wealth at a rate higher than the average person. Get rid of the tax loopholes. Reform the way politics is financed. Maybe create a "GI Bill" except for every adult in America. Don't stop until wealth is not concentrated in the 1% of the population, but spread out among most people. If wages were tied to productivity growth in the last 40 years, everybody would be making 3x what they are making now, but the "owners" took all of that money.
Re: (Score:1)
The simple fact is that if you were running the country and your goal was efficient use of capital, the last thing you'd do is give it to people who'd just spend it on swimming pools and big TVs. Neither of those assets produce more wealth. Neither are an efficient use of capital. What you do is you let people who are prodigious accumulators of wealth keep most of it. Those people naturally find ways to use that wealth to generate more wealth, and that makes the economy grow. That's why people who run
Re: (Score:2)
If MAGAs yearn for the "wonder years" of the 1950's, well we did have an upper tax rate approaching 90%. Seems like we were doing well. Right now we are tipping into an Oligarchy and a nasty feedback loop where Billionaires are making the laws, and giving themselves money, while the majority of the population can not afford glasses, dental, or health care. True prosperity comes from a strong middle class, and not allocating all resources to 1% of the population.
Re:We could bring back the middle class (Score:5, Insightful)
What? No offence but everything you've said couldnt be more wrong. You want money in the hands of people who will spend it, thus generating economic activity, as opposed to those who will invest it in a bloated stock market where the money more or less sits stagnate accruing interest. Most American companies and affluent Americans are sitting on piles of money that are doing zero good for the nation. Money spent is economic activity generated that makes us all richer.
Take a look at third world nations. Their problem isnt that they don't have enough billionaires, it's that they dont have a large enough consumer class. Why would a wealthy person or company invest money into an economy with such low amounts of economic activity? They wouldnt. If there was a large consumer class that might actually buy goods and services though? Now you've got a place where people and companies with money will invest.
Re: (Score:2)
:-) The rich spread the propaganda that the problem is welfare recipients, and I sometimes make the point that you just made. The rich really don't do much. They pile their money in the stock market, hire some servants, and take vacations. I sometimes call the rich "useless eaters", like what the propaganda says the poor are.
Re: (Score:2)
Yup. First world wealth is based on a strong middle class because they spend a high percentage of their money thus generating economic activity. Want to make things better for the country as a whole? Do what you can to expand the middle class. It's not only morally superior, it is also economically superior.
All increased wealth concentration does is take us closer and closer back to the time when the West was mostly comprised of poor people and a handful of wealthy elite.
Re: (Score:2)
America became great post-WWII with the explosion of the middle class during a long period of higher social programs, infrastructure investment and high marginal tax rates. All the evidence in the world shows that a strong middle class is most important for a good economy and high taxes on the "rich" work very nicely in the environment.
Unfortunately, starting with Reagan the US reversed those policies. When will Americans realize that Reagan was a chief villain in the unraveling of the greatness of the co
Re: (Score:2)
> You want money in the hands of people who will spend it, thus generating economic activity, as opposed to those who will invest it in a bloated stock market where the money more or less sits stagnate accruing interest.
That's not how the stock market works, because every trade has two sides. When you buy, someone is selling. The money doesn't sit anywhere or earn interest, it goes to someone else's pocket. It's exactly what you want, excess money goes to someone that wants to spend it now in exchange for you holding a piece of paper some time. Whether its stock, or baseball cards or even crypto bullshit, any market has that function, the money doesn't go in, it is traded and traded and traded until someone holds it or spe
Re: (Score:2)
MAGAs twisted the fentanyl crisis into putting tariffs on Canada. MAGAs have no sense of cause and effect. MAGAs use examples and generalize things, and therefore can not find the root cause of problems, and are incompetent to fix them.
Re: (Score:2)
Set that strawman up and knock it right down. Look at you go.
Re: (Score:2)
> if .. your goal was efficient use of capital
Take that to the extreme, and the conclusion is: the only thing factories should ever make, are more factories.
Re: (Score:2)
"...and that makes the economy grow."
The economy is people buying swimming pools and big TVs, it's not people using capital to accumulate wealth.
In fact, what is this "efficient use of capital" metric? What constitutes inefficiency? Where are the losses that make the use inefficient?
"...if you were running the country and your goal was efficient use of capital..."
If I were running the country, my goal wouldn't be "efficient use of capital", it would be restoration of the middle class. Government expendit
Re: (Score:2)
Its not the owners fault.
Its the monetary system.
Look up the Cantillon effect.
Those closest to the money printer (anyone with assets, be it stocks, real estate, land, etc...) benefit the most.
Those without assets, keep getting poorer.
Those in the middle need a second job as stock pickers and financial traders to just keep up with the devaluation of the dollar from monetary supply inflation.
The S&P500 has barely kept up with the devaluation of the dollar except for a very few select corporations. MAG7 ma
Layman's terms (Score:2, Redundant)
In layman's terms, the US buys a lot of goods from around the world, and the supplier countries use some of that USD currency to buy US investments instead of just buying US products or services. These investments could be shares of US companies, or corporate bonds, or US treasury bonds. The effect is that the US enjoys cheap access to capital, which spurs economic growth.
Trade Deficits? (Score:4, Insightful)
Dear Mr. Thomas Klitgaard:
I understand that the subject of trade deficits is of interest to *You*. But to try and elevate this to a national concern is premature. The BIG problem is overspending by the Federal government. Once *that* gets solved, then maybe, maybe it'll be time to worry about trade deficits.
Re: (Score:2)
Genuinely cannot tell if you're being sarcastic. If you are, great. If not, wtf are you talking about? POTUS made American trade deficits an inter national concern when he used them as justification for starting a trade war with most of the planet. Anyone inside or outside the USA could (should?) want to understand more on the topic.
Re: (Score:2)
Flipside of the coin on this is to raise revenue. If we want to fund services then we should collect revenue to fund said services. This concept that the only possible way to "balance the budget" is to cut spending is just wrong, you can just raise taxes. In fact based on recent events it seems like that is really the most acceptable option.
I mean we have an all Republican government and their current budget plan with cuts all over the place is still expected to grow the deficit $3T over 10 years. This
Re: (Score:2)
Yet, Trump is saying to this day Medicare and Medicare is fraud, waste, and abuse. Health care for Americans is waste, fraud, and abuse. The "Deep State" nutters had their day, dug into everything, fired everybody and then hired them back. I am sure when the accounting is done, DOGE cost more $$ than any cuts that they made. I would like to hope that they change their opinion of the US Government, but I know they will always have their whacked out conspiracy belief system and no amount of facts w
Re: (Score:2)
The conservatives won't change their mind but I do hope this whole exercise will lead to more folks simply not believing the words they say because they don't mean them, they're just lying about caring about the debt or the deficit. Just stop giving that argument any good faith because it is not being made in good faith. We don't have to buy into the WWE style of politics where we have to do kayfabe that Republicans give a damn about balancing anything.
We are just arguing about what to deficit spend on, n
Re: (Score:2)
> Dear Mr. Thomas Klitgaard: I understand that the subject of trade deficits is of interest to *You*. But to try and elevate this to a national concern is premature. The BIG problem is overspending by the Federal government. Once *that* gets solved, then maybe, maybe it'll be time to worry about trade deficits.
This is a common fallacy, though surprisingly I can't find a widely-accepted name for it. I call it the "one thing at a time" fallacy. In the case of individual humans it's valid to want to focus solving one problem before addressing another, but in large organizations it doesn't make sense. Some degree of focus is good, but large organizations not only can but must work to solve multiple problems at the same time, because their size means that they have too many problems to address them serially.
If bot
Re: (Score:2)
The Federal Government does not have control over the money supply.
The Government issues bonds. Those bonds are sold on the open market. Individual people may buy them, or the Federal Reserve might. If the Federal Reserve does, it may print that money, or it may not.
When the Federal Reserve is buying 100% of issued bonds, and no banks are borrowing from the Federal Reserve, then the government will effectively just be printing money to fund its deficit.
Trade deficits measure the wrong thing. (Score:5, Interesting)
The problem I see is that the way we measure trade deficits don't account for the flow of wealth due to the value of American intellectual property.
Consider, for example, that in the trade deficit metrics, China gets full credit for the $500-ish import cost of an Apple iPhone. That, despite the fact that most of that $500 winds up in the pockets of a California company rather than in China itself.
When you take into account the value of intellectual property around the world, it explains why some of the most valuable corporations to be created in the past 50 years [1]are American, [substack.com] despite supposedly persistent [2]trade deficits for the entire period of time. [wikipedia.org] Because we're surprisingly good at creating new intellectual property--thanks to a legal and cultural environment which encourages greater levels of risk-taking than does Europe or Asia.
So all this finger pointing over trade deficits, all the actions taken by the Trump Administration, all the hand-wringing over how the US is somehow being 'bled dry'--is all based on a faulty metric
And so long as we keep measuring the wrong thing, and talking about the wrong thing, we'll keep doing the wrong thing to fix the wrong problem.
[1] https://geekway.substack.com/p/a-visualization-of-europes-non-bubbly
[2] https://en.wikipedia.org/wiki/United_States_balance_of_trade#/media/File:U.S._Trade_Balance_(1895–2015)_and_Trade_Policies.png
Re: (Score:2)
> The problem I see is that the way we measure trade deficits don't account for the flow of wealth due to the value of American intellectual property.
Interesting idea, but I don't think it makes sense.
> Consider, for example, that in the trade deficit metrics, China gets full credit for the $500-ish import cost of an Apple iPhone. That, despite the fact that most of that $500 winds up in the pockets of a California company rather than in China itself.
No... none of the money Apple pays to China for the manufacturing of the device goes into Apple's pockets. Let's suppose the iPhone costs $1000 and has a 40% profit margin (and assume that all cost is manufacturing). Apple sends $600 to China and gets a phone, which it then sells for $1000. If the phone is sold to an American, then from a trade deficit perspective it's just -$600 on the China/US balance of trade. If the phone is sold to a person in a fo
Re: (Score:2)
"And so long as we keep measuring the wrong thing, and talking about the wrong thing, we'll keep doing the wrong thing to fix the wrong problem."
Let's not pretend the current administration is trying to fix problems. It's trying to cause them.
We don't have a problem measuring the wrong things or talking about the wrong things, we have a problem with malignant sociopathy.
Re: (Score:2)
The national debt keeps skyrocketing and the payments on the debt have become onerous. Not a problem?
Dollars are modern gold (Score:2)
Dollars are modern gold. The US prints that gold and gets mined for it by foreigners throwing goods at them.
US Gave Up Much Manufacturing (Score:2, Insightful)
at the behest of the Globalists. So, we don't have as much to sell.
Trump is turning that around, to bring manufacturing of all sorts back to the US and to torpedo globalization. That will do great things to nuke the trade deficit. But we have to have stuff for the rest of the world to buy it, and we have to make it cheap enough that they will buy it instead of something from some other country.
Answer is "Repeal 16" to get rid of the income taxes that have been strangling US manufacturing. Also, automat
Re: (Score:2)
The US in 2024 had $2.94T in manufacturing output, 10% of US GDP. What don't we make here that we should make more of and how much is enough?
Re: (Score:2)
We don't make or make enough consumer electronics, textiles, steel, pharmacutecals, airplanes, ships - need way more shipyards, etc. etc. etc. Visit the iron mine in Northern Minnesota - it is vast, and has just a few trucks and shovels working. It should be far more active, with the ore being smelted in the US and made into steel in the US, not shipped to (somewhere else) to have those things done. Pretty much everything that is not made here should be.
Re: (Score:2)
See I can get down with steel and ships because those are national security concerns, not economic one's which is part of why I don't like the tariffs, Trump constantly conflates these two arguments (deceitfully or through ignorance) when they have little to do with each other and they make expanding those industries harder, not easier.
Everything else though you need to make an argument.
It's not jobs, we are at under 5% U3 rate and have been for awhile, we are labor constrained. It's not national security
Re: (Score:2)
Why? That sounds terrible.
Let's see if we can make income inequality even worse? Price cell phones so high that only the top 3% can afford them?
Do you want to work for $10k/yr? If not, then fuck off.
Re: (Score:2)
"...and the guy is super-productive, being worth the wages of those 100 people..."
And American billionaires are known for paying people what they are worth!
Definitely get rid of income taxes, though, that sounds super well thought out. We replacing that revenue with anything? Or will we just have Elon Musk pay the police and the military? They can all live in the company towns he's building, while you live on the street, at least until the diseases we can no longer control come for you.
A trade deficit is a weird idea (Score:3)
Money's not very useful--you can only use the things you buy with it.
Re: (Score:3)
I have a 100% trade deficit with my grocery store. I am ok with that.
Re: (Score:2)
No one runs a higher deficit than the wealthy, yet here we are wondering why the wealthiest country in the world has a trade deficit. It's almost as though people are stupid, like our president.
Because of capital inflow (Score:3)
Because the rest of the world wants to invest in the US much more than the other way around. This causes the dollar to appreciate making importing in the US cheaper and exporting from the US more expensive. Hence the trade deficit.
[1]https://paulkrugman.substack.c... [substack.com]
[1] https://paulkrugman.substack.com/p/a-balance-of-payments-primer-part
Somewhat simplistic (Score:3)
I'd expect a better analysis from a fed consultant. He completely ignores that the US like all countries print their own money as just one example. You saw it during covid when there ware insufficient buyers for the debt and the fed did QE, ie they bought the debt with printed money. Printing causes a whole slew of other problems often, like rampant inflation. It is way more complex than the article. Way more.
The US is squandering its status as the reserve currency of the world, and it is not going to end well. At some point other countries that hold all those treasuries are going to cut their losses and the thing will implode if we don't get our shit together. Today is just another dead canary in the coal mine with 30 yr rates over 5 again.
Re: (Score:2)
You point out how rates are high as fuck, and talk about people who buy them cutting their losses? lol.
Do you know why the stock market dips when treasury rates go high?
Who the fuck moderated you up?
The risk is people believing we'll no longer pay out those sky high rates- i.e., default on them.
Hasn't ever happened, but there's a first for everything.
Two simple reasons (Score:2)
It's cheaper to make products overseas than in this country and people love buying Chinese-made* crap they don't need. Look at all the ads on here from Temu and Etsy, for example.
If you want to see the trade deficit go down people will need to stop buying stuff. Which of course runs contrary to everything we're told, so it won't happen.
* It's not only China, but Vietnam, Honduras, and others as well. But China is the most noteworthy. I know someone who works in the construction industry and they get the
Re: (Score:2)
[1]Yep. [youtu.be]
[1] https://youtu.be/9GorqroigqM?t=709
This ought to be understood as a *good thing* (Score:2)
It means you are able to persuade the rest of the world to invest in the US. It's why you have (had...?) the world's reserve currency, why you have had amazing wealth and productivity growth for an extended period, etc etc.
Because we are a military empire (Score:5, Interesting)
We just don't like to talk about it. The velvet glove covering the iron fist.
So the way our economic system works is we have the world's largest military, a military capable of fighting basically the entire world at the same time and without nukes. This isn't me making shit up it's literally the US military doctrine. We are set up so that we can fight our two biggest military opponents at the same time. For all intents and purposes that might as well be the entire planet.
From there we don't want to just start a war so what we do is is we get people to buy our debt in the form of bonds. We leverage military and soft power and all sorts of other nasty little backroom deals to encourage the purchase of our debt.
That makes the US dollar the world's de facto currency. If you've heard the word Petro dollar that's what it means.
This in turn means that the dollar is worth way way more than it probably should be. This means that the dollar can buy more goods than it probably should be able to.
So we pay a bit of interest on all that debt but in exchange for that interest we get literally trillions of dollars of imports for a fraction of their actual real economic value.
Everybody thinks about the fucking Simpsons merchandise and ignores all the steel and rare earth minerals and finished goods and wood and food and everything else that we import for, and I cannot emphasize this enough, a fraction of its actual value
The end result of all this is that we are effectively being paid military tribute to our empire. Your quality of life is therefore higher than it should be relative to the system of government and economy and our economic systems.
This of course creates a trade imbalance on paper because we're importing more goods than we are exporting. But that is by design because we are using the international import economy as a means of extracting tribute.
We could do this in a more obvious way but it would require a lot more military and it's higher risk so there's no good reason to do so.
Absolutely nothing about the US economy makes sense until you understand all this. And once you do and you see what that idiot in the White House is doing and realize he's breaking the fundamental system that maintains our entire economy well, you just pretend it's not happening because it's fucking terrifying.
Re: (Score:2)
mod up again. My thoughts about what you wrote is about when I try to reason with MAGAs, and point out facts, they do personal attacks. Just like Trump does to the press and anybody who does not share his exact line of bullying thinking. Then they sit back with a rush of endorphins and think they "owned you", and nothing or less than nothing really gets done, and every body is lesser for the exchange.
Re: (Score:2)
Are you the guy who is running the bot?
I'm just curious because you keep replying to the bot that is stealing my old comments and reposting them.
If you are any chance you could break character and explain why you're doing it? Hell even if you're not I would love to hear your theories or anyone else's about why the strange bot keeps taking my old comments and reposting them with small changes to make them kind of weirdly nasty.
It's the most bizarre thing I have ever seen anything do online before
Re: (Score:2)
if you are talking to me, no I am human. I post as ndsurvivor. I created my account here around 2001. I don't like bots. if you are talking to me.... i am human.
Real goods in exchange of green paper... (Score:2)
Simple as that...
Whole world delivers goods for some green papers that are losing value every year...
What is being actually measured? (Score:2)
What is being actually measured with a trade deficit? Mostly (from what I understand), this is the flow of physical goods. But this is far from the total picture. The US has a huge net inflow of money from things like digital services, financial services, royalties from patents, movies, Coca-Cola, Starbucks...
A sale of a coke in Germany that was made in Morocco made from Cuban sugar doesn't count at all in any trade deficit with the US, but it still results in money being sent to the US. (No, I don't know w
We used to run a trade surplus (Score:3)
We ran a trade surplus till the 1970s. [1]https://www.macrotrends.net/gl... [macrotrends.net]
Corporations wanted increased profits - the easiest way of doing that is to turn the US into a consumer economy. High income and high demand were suppose to spur great consumption - and it did, for a while. The problem is that greed wins and growth wasn't enough. As corporation profits increased, this wealth was used to buy politicians, target universities and judges (see the infamous Powell Memo - SCOTUS [2]https://scholarlycommons.law.w... [wlu.edu] ) with the goal to pay less taxes and take more of the American pie. The result, wages stagnated since the 1980s, productivity increased over 50%, benefits were eviscerated while billionaire wealth globally has seen substantial growth, increasing by 121% between 2015 and 2024. The problem is accelerating. In 2024, the wealth of billionaires increased by a staggering $2 trillion. This represents a daily increase of approximately $5.7 billion. The rate of increase was three times faster than the previous year. [3]https://www.ubs.com/global/en/... [ubs.com] The latest US budget is a perfect example - slash benefits giving billionaires more tax breaks, at a time when they're already living like kings above any laws.
[1] https://www.macrotrends.net/global-metrics/countries/usa/united-states/trade-balance-deficit
[2] https://scholarlycommons.law.wlu.edu/powellmemo/
[3] https://www.ubs.com/global/en/wealthmanagement/family-office-uhnw/reports/billionaire-ambitions-report.html
Re: (Score:2)
"It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness..."
[1]http://www.boisdejustice.com/Drawings/Drawings.html [boisdejustice.com]
[1] http://www.boisdejustice.com/Drawings/Drawings.html
Re: (Score:2)
The classic Tale of Two cities, the first sentence, that seems to apply to every time period, and every circumstance.
Re: (Score:2)
Dickens was a remarkable writer. His stories are more relevant now than ever.
Re: (Score:2)
I was a cold hearted "tech head", kind of like Musk, but I got a Bachelor of Science degree, and was forced to take English, Literature, and other classes, to have a "well rounded education", I guess. Looking back at it, I kind of wish my mind was 100% in programming and electronics, but they pried my mind open to philosophy and ethics. Damn Them!!!
Because we buy stuff (Score:2)
Life in America is expensive. We pay a lot for housing, healthcare, transportation, and food -but still we have disposable income. We are not a nation of savers. We do not generally have savings available in our bank accounts. We invest. We own stocks, bonds, mutual funds, IRAs, 401Ks, etc.
We spend what's left on buying stuff.
But we don't make stuff. Our economy has moved from manufacturing to services. We know things. We design things. We do things. Services count towards our GDP (because they ge
The population of the richest country in the world (Score:2)
The population of the richest country in the world enjoys spending its money buying nice things. Since they are the richest country in the world, the mean wage there is high. Consequently, it's much cheaper to buy certain things from other countries, where the wages are far lower. /s
We've been coasting through the decades (Score:2)
The US hit its peak productivity int the 20th century. Once we let the the vulture capitalism take root, the have slowly been extracting the wealth of this nation.
Thanks to propaganda of trickle down economics, the middle class thinks they have been earning interest on our investment. Rather than the reality that the vast majority of us have had our labor stolen from us. We've been encouraged or sometimes even forced into debt. The winners are the landlords, the bankers, and the capitalists that have be su
Maybe the quality... (Score:2)
That isn't apparent in government and industry has something to do with it. As in, the last kind of surplus years were before 1975 I reckon. It's been pretty fire from then year on year.
Re:Simple (Score:5, Insightful)
Hmm. Communist = Friend of Putin? So you say Trump is an America-hating communist? Interesting. A bit far out, but makes some sense.
Re: (Score:2)
Oh, your comment was serious? I though we were doing parody. My apologies.
Re: (Score:1)
Communists taking advantage of the free market? lol. What about the vast amount of raw materials that the US can't produce locally. Are those also because of evil "america hating" folks? Do you know how unhinged you come across?
Re: (Score:2)
Someone needs to go visit the midwest. I assure you the category of human that does that isn't racially-based.
Re: (Score:2)
My guess is that Trump wants credit for everything, so he creates problems, let the problems fester, then jumps back to the status quo and takes credit for everything. Then MAGAs get down on their knees and worships him.... for .. creating problems... and really doing nothing.
Re: (Score:2)
Yet Republicans created the 1% who have wealth estimated at around 41 Trillion dollars, roughly equivalent to the National Debt.
Trade imbalances are not necesarily bad (Score:5, Insightful)
Trade imbalances usually mean we get more stuff for cheap, raising our standard of living. The more they buy from us, the better our industries do too.
We were selling shit tons of services. All these blanket tariffs have done is hurt everybody, but ourselves especially.
Fuck Trump.
Re: (Score:2)
Because Asian products are often less expensive and of better quality.
Re: (Score:3)
And easier to get in addition.
Re: (Score:2)
I have one of the first DVD players ever manufactured (first 100k). It still works. I watched roommates burn through Chinese DVD players that would last only a few years before dying. It's not if it's Asian, it's also where it's made in Asia. Finally, we don't make consumer products anymore, so there's even a POS from China is better.
Re: (Score:2)
> and of better quality.
You owe me a new keyboard.
That's the dumbest shit I have ever heard.
China is fully capable of making high quality shit. The problem, is that their high quality shit isn't any cheaper than anyone else's.
The less expensive Chinese products you purchase are, in fact, pieces of shit.
I've burned through hundreds of cheap Chinese computer/electronics doodads.
Re: (Score:2, Redundant)
Well... that and world pirates the stuff made in the US. Many countries aren't paying for our music, TV, movies, games, and software... they're just stealing it.
Downside of basing your economy on "soft" goods instead of physical items, I guess.
Re:Trade imbalances are not necesarily bad (Score:5, Insightful)
> Well... that and world pirates the stuff made in the US. Many countries aren't paying for our music, TV, movies, games, and software... they're just stealing it.
False. Theft is when you deprive someone of something, which isn't happening here. Those countries where nobody pays for our media wouldn't be paying if they weren't consuming that media, so nothing is lost. But something is gained: advertising, publicity, dissemination of American views and attitudes around the world. If the nations ever get to the point where people can afford to pay for that media, they will also have the legal framework to allow pursuing copyright claims. They won't be able to grow their economy to that point without it.
> Downside of basing your economy on "soft" goods instead of physical items, I guess.
That would be a downside if it were true, but the USA still exports a lot of physical items. We're a world-leading exporter of food, only China exports more heavy equipment than we do (and that is a fairly recent development and we didn't decrease those exports much, they increased theirs) and of course we're also the world's largest arms merchant. On the other hand, Cheeto Benito is in the process of making it true as we speak...
Re: (Score:2)
> False. Theft is when you deprive someone of something, which isn't happening here.
It is the theft of copyright. The original owner no longer owns the sole right to copy his work--he is deprived of it. Whether that's an actual loss of profit is another discussion.
Re: (Score:2)
No. You did not steal someone's copyright. If you were to do that, then you'd have their copyright (hint: you don't.)
You have violated their copy right
Re:Trade imbalances are not necesarily bad (Score:5, Interesting)
> We're a world-leading exporter of food ...
Noting that Trump's first trade war with China pushed them into switching from getting most of their soybeans from the U.S. to Brazil; they haven't switched back and are now getting more soybeans from Brazil, instead of the U.S. due the current trade war. Looks like they'll be doing this for other food stuffs too...
Google: [1]China soybeans US Brazil [google.com]
[1] https://www.google.com/search?q=China+soybeans+US+Brazil
Re: (Score:2)
Same thing happened with Washington state's apple farmers - they largely lost the Chinese market during Trump term #1, and it hasn't come back.
Re: (Score:2)
That's not an export issue, though. As long as DRM remains in use, piracy will remain the only serious option for getting conveniently-playable media, whether you're inside or outside the US. The US has lots of people who don't want to make needless sacrifices when it comes to quality and convenience.
Re: (Score:3)
Right. This can be looked at through the lens of the Citizens of the USA saving $5,000 more a year, and we immediately turn around and spread the money around on services. Eating out, taking vacations. Otherwise, we would just pay more, and get nothing but more work. Trump thinks we will go back to the 50's where people were slaving away screwing in nuts and bolts in a Factory for 10 hours a day, 6 days a week. Good thing Trump is there to raise prices by $5,000 a year per person. Now we can do w
Re: (Score:2)
Go look at the BMW plant in Spartanburg, SC. Look at how large the parking lot is. This is the most automated car manufacturing plant in the US. Why do they need all of that parking if everything, as you claim, is done by robots? Stop spreading this myth that robots can completely replace labor. Robots compliment labor and make the heavy lifting go away. They still can't completely replace it. Claiming that factories exclusively run on robots is a scare tactic to keep jobs from coming back.
Re: Trade imbalances are not necesarily bad (Score:2)
> Claiming that factories exclusively run on robots is a scare tactic to keep jobs from coming back.
Not exclusively robots, but enough. The first chart in this American Enterprise Institute page tells the tale: [1]https://www.aei.org/carpe-diem... [aei.org] You can't strawman away 45 years of increasing manufacturing output accompanied by declining manufacturing employment, nor can you Great Pumpkin the jobs back to 1980 levels.
[1] https://www.aei.org/carpe-diem/october-2-is-manufacturing-day-so-lets-recognize-americas-world-class-manufacturing-sector-and-factory-workers/
Re: (Score:2)
What is your source on that being the "most automated" car manufacturing plant in the US?
Spartanburg BMW Plant:
[1]https://www.youtube.com/watch?... [youtube.com]
Tesla:
[2]https://www.youtube.com/watch?... [youtube.com]
Now, maybe they're avoiding showing the robots in the BMW plant, but I'm seeing a LOT more automation beyond cranes for moving cars in production around in the Tesla video.
[1] https://www.youtube.com/watch?v=W5PIWaNn4Jk
[2] https://www.youtube.com/watch?v=45slYC99uUg
Re: (Score:2)
From what I could find Tesla Fremont employs somewhere in the range of 20k people and produces from what I could glean about 500-600k vehicles per year (32.5 per worker), Spartanburg about 11,000 workers and 450k vehicles per year (41 per worker) so depends how you look at it, of course I don't think we would find breakdowns on who is admin versus actually assembling so I think it's fair to say both factories are very automated and yet both still need literally thousands of people to operate.
Re: (Score:2)
You're seriously rhetorically asking "why does a car manufacturing plant need a parking lot to place the cars it produces on" and expects it to be some kind of "gotcha".
And that is the absolutely only argument you have; that you can't think far enough to comprehend the need for space to place produced vehicles on.
I've been disappointed by a lot of commenters in my day, but you take the cake.
Re: (Score:2)
Were the photos taken on Saturday? Sunday?
A trade balance requires an equal population (Score:5, Informative)
Most trade balances are positive and inevitable. For example, take New Zealand. They produce great agricultural products and have a small population. We want their dairy, meat, produce....they simply don't have enough people that even if they bought nothing but American imports, they could match our demand. Another example is Ethiopia...they're small and poor and make the world's best coffee. They could never match our demand for their goods. If every man woman and child in Ethiopia spent every dollar equivalent on American goods, they could never counter our demand for their valuable and expensive coffee.
The trade balance is a stupid concept from our days of competing with Japan, who had a large economy and directly competed with us. They could theoretically make sense against a large economy, but never against the majority of countries. Even if you think a trade imbalance is bad, the way Trump does, there's a smart way of correcting that and how Trump handled it was lazy and sloppy.
I don't personally think trade imbalance with an equivalent country is bad, but if I did, I would first gather better metrics and make it per capita...and then...focus on making American products more competitive, not making foreign ones more expensive. Countering other nation's tariffs?...that's actually smart, to Trump's credit. Had he stopped there, I'd celebrate his efforts...but throwing in extra about trade imbalances, calculated by total trade is just abysmally stupid...both in how he computed it, but more importantly, to not factor in that some economies are just more specialized than ours, like New Zealand or Ethiopia. Most economists would recommend subsidies over tariffs...they make our goods more appealing to everyone, not just American customers.
Re: (Score:2)
Wrong, full stop, period.
You just tried to wrap the economy into a zero-sum equation. It is not. Re-evaluate and come back.
Re: (Score:2)
> A permanent trade deficit that requires more and more debt to be printed and sold for the future generations supposedly to pay back (will never happen, the default and inflation will take care of that) is due to a population consuming more than it produces, full stop, period.
You're conflating the national debt and trade deficit which are two completely different things.
The rest of your post isnt much better. You suggest there isnt enough wealth for half the country to be on government medical insurance when the rest of the first world can afford to have their entire population.
Re: (Score:2)
Even if the US had free healthcare, and full social protection in the form of welfare and food stamps, for every citizen, and provided free higher education for everyone, it wouldn't spend even half of what the economy generates, much less *more* than it generates.
How do I know? Nations which generate less money per capita do this, and it doesn't cost more than their economy generates.
There is no need to tax even remotely as high as you suggest to afford infrastructure, health care, education and social ser
Re: (Score:2)
Some people should just go back and read Adam Smith. A large part of the trade deficit is the fact that the average U.S. resident has a comparatively large buying power, in part financed by the U.S. government as bailouts, subsidies and Corona payouts. While this money is not distributed evenly and clustered at the top 1%, it still is able to buy a lot of goods, more than the U.S. industrial productivity increase can offer. There are three ways this imbalance can be leveled out: 1. Buying abroad, increasing
Re:Trade imbalances are not necesarily bad (Score:4, Informative)
The trade deficit is also a lot smaller than Trump says. He only measures GOODS trades, but if you include services, suddenly the picture can change substantially. The US bought more "stuff" from say, the EU, but if you count services, the EU bought more stuff, so the US has a trade surplus with the EU.
Economies grow and evolve. You generally start with a resource based economy where you dig it out of the ground or something then sell it. You then take that money to process that ground stuff into higher value resources and sell that. The next evolution is to grow into a manufacturing economy where you're making labor intensive goods - that is, goods that require a lot of labor to produce like toys, clothes, and other things. This grows the economy until you can switch to a capital intensive manufacturing where you make high value stuff that requires a lot of capital to make (and usually a lot less labor). Think heavy industries like vehicle manufacture. The final stage is generally a services based economy where you're selling services to the world stuff that can be made with very little rssources. Think stuff like software. movies, books, music, etc. This also includes things like tourism, and education.
Of course, Trump decided to decimate tourism and education with his policies, thus destroying some of the largest services the US economy has. Foreign studens come to the US to study, and they're paying higher fees for the privilege of studying their chosen subjects.
And trade deficits aren't bad at all. You sell your time to your employer - but do you buy you're employer's products or services at the same amount? Chances are you don't so your employer has a trade deficit with you. Maybe they should enact a tariff and reduce your pay to compensate?
Likewise, your supermarket has a trade surplus with you, since you buy more stuff from then than they do from you.
That's how meaningless a number it really is.
The US has trade deficits because they're the world's richest country and they're basically spending money buying stuff from all around the world. Some are goods, some are services, And the US is good at making those things into higher value products and services which it serves to the world.
One of the big reasons for the US Dollar being a reserve currency is because the US prints money and spreads it out through the world through its spending., Other countries need US dollars to do trade with others as well, and the US has made the US dollar relatively available to everyone so everyone uses it.
Trump wants to bring the economy back to the 1950s where a lot of it was labor intensive, which makes zero sense. Sure in the 1950s it means you could get good money working at a factory with barely any schooling, but as the economy advances, the base level of education goes up to produce those higher value goods and services
Re: Trade imbalances are not necesarily bad (Score:2)
You can only maintain a deficit on loans, and loans are given because the dollar is strong. Normally a deficit is equalled by free floating currencies, but as USA is so strong everybody keeps buying dollars, to invest in US companies and buy bonds. Some say Trump's idea is to weaken the dollar. But by weakening the dollar, the cheap loans go away. Also foreign investors will start to look elsewhere. As the cost of production in the US also falls due to lower salaries relatively measured say euro, the manuf