Do you need a chart? Notice how trade surpluses (as in Germany or Japan) reduce the budget deficit, while trade deficits (as in the US or Canada) increase the budget deficit.
http://media.ft.com/cms/cf0ab07c-7a20-11df-9871-00144feabdc0.gif
Once you adjust for trade, notice too how govt and private sectors balance out in charts for eight different countries (plus G7, Eurozone and “advanced countries). That’s not a coincidence. Government deficits increase private savings, while government surpluses cause private dissavings. That’s why the economy crashed just before Clinton left office and why it recovered after Bush cut taxes.
“The sectoral balances approach, pioneered by Wynne Godley and now in use at Goldman Sachs and PIMCO, provides a useful way for thinking about the imbalances that may occur. It groups the inflows and outflows according to sector. If any sector takes more money out of the economy than it puts back in (saving), and is not compensated for by the other sectors putting more money in than they take out (dissaving), then the overall flow of money to the Domestic Producers, NGDP, decreases (Paradox of Thrift).”
http://stopmebeforeivoteagain.org/2010/07/intro_to_economism.html
You must be the dumbest person on this forum.
