General Discussion

Takket

(21,726 posts) Sun Jun 10, 2018, 10:36 PM Jun 2018

NY times article on the trade deficit

https://www.nytimes.com/2018/06/09/upshot/what-is-the-trade-deficit.html

Good read if, like me, global trade is not something you think about every day..........

Really highlights how clueless drumpf is. He is playing games with our entire economy over the cost of milk in Canada.

~A core idea that Donald J. Trump has embraced throughout his time in public life has been that the United States is losing in trade with the rest of the world, and that persistent trade deficits are evidence of this fact.

In this accounting, the $69 billion United States trade deficit with Mexico or $336 billion gap with China is something of a scorecard reflecting diminishing American greatness.

The vast majority of economists view it differently. In this mainstream view, trade deficits are not inherently good or bad. They can be either, depending on circumstances.

As the president’s emphasis on trade deficits puts the United States at odds with allies — in this case at the Group of 7 leaders meeting this weekend in Canada — the trade-offs in making this an overwhelming focus of economic diplomacy are becoming more clear.
~

3 replies

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Highlight:

NY times article on the trade deficit (Original Post) Takket Jun 2018 OP

I guarantee you... D_Master81 Jun 2018 #1

What's sad is many of trump's advisers believe trump is wrong. For instance, Larry Kudlow is a free Hoyt Jun 2018 #2

If you import a lot of products using foreign cheap labor, and export products using well Fred Sanders Jun 2018 #3

D_Master81

(1,823 posts)

1. I guarantee you...

Reply to Takket (Original post)

Sun Jun 10, 2018, 10:57 PM

Jun 2018

Trump hasn't even thought about this issue as much as the author's of this article did. Trump gets his info from advisers that are bootlickers on a 1 page summary with graphs and pictures and just goes with it, nuance be damned. We're all screwed.

Hoyt

(54,770 posts)

2. What's sad is many of trump's advisers believe trump is wrong. For instance, Larry Kudlow is a free

Reply to Takket (Original post)

Sun Jun 10, 2018, 11:26 PM

Jun 2018

trader, yet he’s carrying trump’s water and insulting important trade partners and allies. trump has made sure he has ass-suckers for advisers. We are screwed until someone steps up like Mueller, GOPer leadership, 125 million voting for Democrats in just 5 months.

Fred Sanders

(23,946 posts)

3. If you import a lot of products using foreign cheap labor, and export products using well

Reply to Takket (Original post)

Mon Jun 11, 2018, 12:36 AM

Jun 2018

paid labor, that is a balancing not accounted for in raw trade deficit numbers.

A billion dollars of socks made in China, using the local currency converted to dollars, is not the same economic value as a billion dollars of heavy machinery made in America, using the world reserve currency.

Agreeing to be the world's reserve currency, and the many benefits of that, comes with a cost Trump and his crack team of cracked TV host "economists" (fucking Larry Kudlow, what a dunce! )either fail to grasp or simply ignore in order to feed more chaos for the sake of chaos:

"The roughly $500 billion trade deficit that the United States runs each year isn’t just about poorly negotiated trade deals and currency manipulation by this or that country. It’s also, to some degree, a byproduct of the central role the United States plays in the global financial system.

There’s even a name for this: the Triffin dilemma. In the mid-20th century, the economist Robert Triffin warned that the provider of the global reserve currency would need to run perpetual trade deficits to keep the world financial system from freezing, with those trade deficits potentially fueling domestic booms and busts."

How is it possible for a nation to have a cumulative trade deficit running 10 TRILLION per decade and still have a strong currency, decent economy, second longest growth streak in history, lowest unemployment since most can recall...clearly, it is possible and the trade deficits are not the problem, they are part of the whole equation.

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