NEWSFLASH! The U.S. GDP is $12,000 Billion per year.
$43.5 Billion is therefor only .003625% of America's annual production.
Lets keep our eye focused on the larger side of the pie, shall we...
Posted on 10/17/2003 8:35:58 AM PDT by the_greatest_country_ever
NEWSFLASH! The U.S. GDP is $12,000 Billion per year.
$43.5 Billion is therefor only .003625% of America's annual production.
Lets keep our eye focused on the larger side of the pie, shall we...
The Nation's international deficit in goods and services decreased to $39.2 billion in August, from $40.0 billion (revised) in July, as imports decreased more than exports.
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Tell it to the hourly workers, auto workers, IT workers, progammmers, textile workers, and a host of others who are losing jobs to overseas workforces.
The economy and jobs are just as big of bombs for Dubya in 2004 as they were for his dad in 1991.
My very sincere apologies to you! (believe me, when I intend to offend (rarely), there will be no doubt in your mind!).
Do please note that in my response there was absolutely no ad hominem comment, except if you choose to consider that ''you're two administrations too late'' is somehow, mysteriously, ad hominem.
No politician's stated estimate of what ANY programme will cost is even worth reading and, (ad hominem for the first time) certainly not believing for a nanosecond, and, if you haven't got that far in your political/economic views yet, you're too bloody dumb to breathe, let alone vote.
That's my whole point of Post #41. The import/export imbalance ($39 Billion per month now) is such a tiny fragment of our overall economy ($12 Trillion per year) that it hardly factors in.
Stop looking at the tree in front of you and begin to comprehend that there are thousands of forests all around you!
Don't look now, but unemployment is already falling below 6% (the level at which has always been historically considered "full employment"), and should the Dollar drop further, so too will our unemployment.
It's not just Europe. In the past two yearsthe US dollar has dropped ~20% against the Canadian dollar and over 10% against the Yen. As far as that being good for US made goods, the drops in the dollar over the past two years has not stopped the loss in the number US manufactured goods. We do produce a hell of a lot of grain, but that has been more than offset by manufactureres closing up shop in the US and moving that capacity out of the country. All a weakening dollar is going to do is increase prices for consumers in the US. It may help the agricultural sector, but it's not going to spur demand for US manufactured goods because the US is not a friendly environment for manufactureres.
Lets keep our eye focused on the larger side of the pie, shall we...
You're comparing annual GDP to a monthly ballance of trade figure. Right now our annaul balance of trade deficit is approaching 6% of GDP. No country can operate with that kind of deficit for very long without serious economic consequences.
The Dollar has dropped more than 20% against the Euro and other currencies in the last few months, yet we haven't seen U.S. prices of homes and cars and aircraft and boats and clothes go up 20% in those same few months.
Why not?
Well, for starters, the U.S. Dollar has only dropped in value against other foreign currencies, not against itself (i.e. inflation).
Going on a European vacation might cost you a bit more right now, but vacationing in the U.S. still costs about the same, for instance.
Likewise, oil exporters, who get paid for their oil in U.S. Dollars, can still buy the same amount of American goods, services, stocks, and bonds...at least, they can do so inside America herself.
Their Dollars are still just as good here as before since inflation hasn't set in.
And why hasn't inflation set in? Higher productivity here in the U.S., for one thing. For another thing, the foreign exchange value of the Dollar is only a very small part of the overall economic equation. Imports are only 9% of our economy, for example, and they are offset by about 6% of our GDP that comprises our own exports.
And the difference between our imports and exports, what people call our trade imbalance, is the percentage of our GDP that is affected by fluctuations in the foreign exchange value of our Dollar...and that 3+% of our annual GDP is the small piece of the pie compared to the 97% of the rest of our economy.
In short, the foreign exchange drop in the value of the Dollar affects only a minor portion of our economy (and that impact is positive for our manufacturers, btw).
Sadly, there are others (not you) who either deliberately or ignorantly confuse "inflation" with the entirely different thing known as foreign "Exchange Value" as if they were one in the same...as if whenever the Dollar drops in foreign exchange value that you would get the same amount of domestic inflation here. Some of those people are even degreed economists.
But anyone who can see that we haven't had 20% inflation even though the Dollar has dropped 20% against the Euro...will surely see through such confusion.
Let's do the basic math.
Our most recent monthly trade imbalance is $39 Billion. Extrapolated over 12 months would yield an imbalance of $468 Billion.
Divided by our $12 Trillion annual economy would give us 3.9%.
So the most recent government data that we have shows a current trade imbalance of less than 4% per year. Interestingly enough, our overall economy is growing somewhere between 3.3% and 6.5% per year...hardly a trend that is dangerous to us.
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