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To: count-your-change
I’ll share this simple truth with you: Imports have to be paid for with exports.

That is a commonly-used phrase, but it's meaningless and just false as used.

I can buy a car from Korea and not sell a single thing to any other foreign country. So can 300 million other Americans. The trade balance is nothing but the sum of every American's purchases. Imports certainly do not have to paid for with exports in the sense of sales to foreign countries.

The United States does not trade with China -- Americans trade with Chinese countries. The meaning of the phrase has become corrupted.

Now, if I make my living, say, by cutting down trees and selling them as firewood, then I certainly must export my product -- but I export it to people outside my family. I then use the proceeds to "import" the other goods and services I need.

That is the only sensible meaning of the phrase.

19 posted on 08/20/2012 3:57:47 PM PDT by BfloGuy (Without economic freedom, no other form of freedom can have material meaning.)
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To: BfloGuy

As I said, “I’ll share this simple truth with you: Imports have to be paid for with exports.”

Your example proves the correctness of my comment. Thank you.


20 posted on 08/22/2012 10:11:20 AM PDT by count-your-change (You don't have to be brilliant, not being stupid is enough.)
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