In Defense of "Trade Deficits"

Washington Times via Capitalism Magazine ^ | March 22, 2003 | Daniel J. Mitchell

[1rudeboy]

bttt

[underbyte]

This is like the Dotbomb scam. Pay 200 X earnings because it will be worth it someday.

A deficit is a loss. How mant factories did china build in the US last Year with their 100 bilion dollar profit?

Deficit Plus - What is the cost to our economy in lost jobs ?

Free traders assume a socialist one world trading system, In fact we are seperate, we lost, they gain simple.

If the 500 billion annual trade deficit was being re-invested productively it would have canceled out the goverment 460 billion deficit and supplimented our tax stimulus package. Our economy should be going gangbusters right now.

I do not see capital expenditures on factory and equipment that would provide stimulus to jump start the economy.

I do not see the outsourced unemployed going on a spending binge leading us out of the recession.

This guy is hogwash

[RLK]

It's amazing that these idiots keep repeating this tripe. The stock market crashed in October, 1929, but Hoover did not sign the tariff into law until June 17, 1930. There's no way that Smoot-Hawley could have caused the Great Depression.

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It's not amazing. It's a desperate attempt to save a lunatic fanatic ideology.

[1rudeboy]

But we are doing better than the economies overseas. And we know that foreigners are investing their money here. As for your "Dotbomb" example, it is so far off the mark that it makes my head spin. Try to develop it further.

[underbyte]

"And at historic highs, it diminishes our domestic economy by about 4½% - more than twice the normal variation. This is NOT insignificant."


I will say it again - Biggest transfer of wealth in history

[superloser]

Yep, that's 100% correct.

However, there is one thing that people have forgotten.

On a gold standard, when you run out of gold, you are out of money. At 5% a year, in 20 years, the country runs out of money. Better be producing something to trade for some of that gold back!

But we have Alan Greenspan and a printing press! We can make as many dollars as we want to send overseas. As long as our trading partners are willing to accept our freshly printed slips of paper, we can party on forever.

Isn't that the "new" American way?

[underbyte]

It is a scam.

Year to year trade deficits are great for our economy = Scam, spin

"But we are doing better than the economies overseas"

Maybe compared to France

And can we match say.... China's GDP growth in real terms over the last ten years? Might be interesting to plot their growth against our deficit numbers.

Rhe US of A became a major world power through export - Manufacturing and exporting Imagine that!

[underbyte]

I agree

The poor will always be poor

The really rich get richer

The middle class, well we just get diluted

[edsheppa]

I will say it again - Biggest transfer of wealth in history

Absolutely - we've got the cars and TVs and they've got bits of paper.

[JmyBryan]

Believe it or not - all that stuff we buy adds to our national wealth. Money is only useful to get things. All that foreign stuff we buy, adds to our asset balance - in whatever way you wish to account for it.

[RLK]

Absolutely - we've got the cars and TVs and they've got bits of paper.

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I don't know who "we" is. But at least you do until you are affected.

[underbyte]

You forgot the whole modern economy we built for China, the technology we transfered and the military machine they are now building with our generous contribution

all I got was a transistor radio out of it

[RLK]

Believe it or not...

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Since you gave me the choice, I don't believe it. Economics is less superficial than that.

[underbyte]

"Believe it or not"

I do not. Real wealth is the capacity to produce a stream of income from useful products. This enables reinvestment and re-innovation.

Consuming your way to prosperity?

It is not only the quanity of the income it is the QUALITY that is of the Primary importance. With trade deficits it is the Quality that is falling the quanity will drop later

[edsheppa]

I don't know who "we" is.

It's a national trade deficit right? "You" insist on lumping my transactions in with everyone else's so "we" is people in the US.

But at least you do until you are affected.

Of course I've been affected. I've got all this inexpensive but generally high quality stuff. I figure it's definitely worth more to me than the labor I used to purchase it.

[edsheppa]

China will turn democratic, in some form, well before it is a conventional military threat. Their military's primary function is and has been to suppress dissent.

BTW, are you asking for a subsidy to you can upgrade that radio?

[Brian Allen]

Great find. Astute piece.

Should get the trade luddites, go-pat-goers, "economics" philosophers and other zero-sum gamers frothing at the chops.

Americans create Wealth and we can and will buy whatever we want, wherever we want!

The nice Japanese send US all of their excellent products and we give them paper in return which they in turn give to real-estate companies to buy American property -- which we keep here! AND, poor fools, they dump their profits in the US Treasury to pay retired railwaymen their pensions, subsidise Freddy May, feed the social "security" Ponzi scam, subsidize, thanks to tarrif "protections," Ford and General Motors at the rate of $5,000.00 per car, pay America's new welfare rich, the American don't farmer Billions -- and put $100,000.00 per year steel and auto workers illiterate kids through university!

Seems like with all of the Lexus cars, Panasonic camcorders, JVC tvs, paper-money and real estate being in America and the Japanese going home with useless bits of Treasury paper to make us some more cars, tvs and camcorders, we win!

Laughing!

And if you need to have a "balance of trade?" Don't worry about convincing Japanese to buy Zenith tvs and Chrysler cars!

Convince Americans!

Good luck!

[underbyte]

China will turn democratic, in some form, well before it is a conventional military threat. Their military's primary function is and has been to suppress dissent.

Yeah, I liked their democratic moves when they forced down our plane. Oh well time will tell.

"BTW, are you asking for a subsidy to you can upgrade that radio?"


Yeah, well when we are through subsidizing everybody else I can upgrade myself

[RLK]

China will turn democratic, in some form, well before it is a conventional military threat.

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Do you have proof for this sales pitch?

[ETERNAL WARMING]

What utter nonsense. Free trade isn't free trade with an artificially high dollar against China and India's artificially low currencies. American workers can never compete with all the cards stacked against them. I also notice that these "Free Traders" are real quick to protect their own industries by lobbying the Senate to not allow consumers access to out-country goods. What's good for the goose, baby.