That is not at all how it works. Not even close. For one thing, money and wealth are not the same thing. Money is a token of exchange based on the wealth collectively generated by the production of goods and services. That's why when the money supply falls short of that wealth production it gains more buying power (deflation) and when the money supply surpasses that wealth production it loses buying power (inflation). For another, even when we do send American dollars overseas, it isn't as if they disappear into a black hole and are lost. They come back to us in the form of foreign investments. Also, if you want to talk economics, you need to at least understand perhaps the most basic concept introduced in every introductory economics class: trade is not, as you are characterizing it, a zero-sum game. Trade creates wealth. If I can buy a product from a foreign source for cheaper than I can get it from a domestic source, then it creates more wealth for me to buy it from the foreign source. My inputs go down while my outputs are maintained. I can use the money I've saved toward other productive uses, such as purchasing services here in the US. Preventing that trade destroys that potential wealth in what economists call deadweight loss. You are obviously well-intentioned, but no, you are not talking economics. You are talking basic misunderstandings about economics.
. . . US importers are, by and large, the ones who pay that tax. Not China. And those businesses either absorb that cost or forward it on to consumers. Tariffs hurt the businesses and consumers in the country that institutes them. The do not just effect the people trying to export to us.
These are all based directly on quotes from Trump. Trump has stated all of the things I just mentioned. He has stated that trade deficits are monetary losses and that we would be that much richer if we didn't trade. Are you able to answer the questions now? Do you need me to quote him for you? "Our trade deficit ballooned to $817 billion . . . Think of that. We lost $817 billion a year over the last number of years in trade. In other words, if we didn't trade, we'd save a hell of a lot of money." So let's try that again: Is he right about trade deficits being a monetary loss? Is he right when he says that a trade deficit of $X means that we have lost $X in trade and we would be $X richer if we hadn't traded at all? Yes or no. Or I can just take your silence to mean you weren't aware he had these beliefs and don't want to address them because you, thankfully, realize how ignorant they are. This is why I was against Trump. He's the most anti-capitalist, anti-free trade Republican candidate we've had since Pat Buchanan.
Good information but, Trade deficit is not necessarily a valid indicator of a good economy. In many cases the reverse is true. One thing to add is that GDP growth - growth that was not nearly as high as predicted by proponents of the tax cuts - peaked at 3% and is expected to decline this year. What we then got from the tax cuts and the Trump injecting hundreds of billions of extra dollars in deficit spending into the economy was a brief "nitrous oxide" boost. Exactly as I predicted in this forum early on in 2018.
We are talking about different things. You are defending the idea that a trade deficit is not always bad in some situations. I didn't suggest anything different. I'm simply saying that a trade deficit causes a net transfer of wealth abroad. Common sense tells you that. You are trying confuse the situation with things such as foreign investment which has nothing at all to do with trade deficits. Obviously if you can import a product for less than buying it domestically, it will contribute to profitability. That is why we have so much outsourcing. That also has nothing to do with trade deficits. I said clearly that trade deficits don't affect the traders. I said our entire economy transfers wealth abroad through trade deficits. That is precisely what happens.
Trade deficits do not cause a net transfer of wealth abroad. Whatever "common sense" tells you, Econ 101 says the opposite here. We are exchanging money (money that comes back to us) for goods and services whose marginal utility is more valuable than the money we paid. That isn't a transfer of wealth. That's wealth creation on both sides of the exchange.
So, its ok to tax the American consumer because China taxes theirs........? Not sure that I agree with that, especially when we are talking about taxes NOT authorized by Congress.
Try working on a sense of humor. How is Trump working to reduce our imports and exports to zero respectively.
Strike 2. And I'll be happy to answer your questions once you've answered mine. One more shot: Is he right about trade deficits being a monetary loss? Is he right when he says that a trade deficit of $X means that we have lost $X in trade and we would be $X richer if we hadn't traded at all? Yes or no. I hate to break it to you, but this whole misconception that Trump has about trade deficits is why he's instituted tariffs (again, unconstitutionally) to try to "correct" them. Trump isn't just joking about not understanding who trade deficits are. He's repeated this nonsense many, many, many times. He is actually ignorant enough to think that trade deficits mean we are losing money on trade.
And if you actually believe your nonsense you will be able to show that he is doing everything in his power to force US exports to zero. Where is the evidence supporting this ??
I never claimed he was trying to do that. That's your . . . what did you call it before? . . . "manufactured" statement. And yet again you are expecting me to answer your questions while doing everything possible to dodge addressing mine. That's strike 3. But I'll toss one more freebie: Is he right about trade deficits being a monetary loss? Is he right when he says that a trade deficit of $X means that we have lost $X in trade and we would be $X richer if we hadn't traded at all? Yes or no. If you find anything confusing about these questions, feel free to ask for clarification. No one said, for example, that "he is doing everything in his power to force US exports to zero." No one.
I'm sure he meant what he said. He didn't say he was going to end all trade. He said, when there is a trade deficit, that we'd be that much richer if we hadn't traded. I'm sure he means it when he says he thinks that trade deficits are lost money. It is one of the few consistent things he says, and this economic illiteracy has clearly lead to some of his unconstitutional trade decisions. That wasn't a complete dodge, so one more freebie: Is he right about trade deficits being a monetary loss? Is he right when he says that a trade deficit of $X means that we have lost $X in trade and we would be $X richer if we hadn't traded at all? Yes or no.
1) Already addressed. Please read the the post you just quoted. The evidence that he believes that trade deficits are a monetary loss are that he says so almost every time he talks about trade and he has made trade decisions according to that superstition. Have you seriously never heard him talk about trade deficits before? Glad we could clarify that it is his critics who actually listen to what he says, not his supporters. 2) Once again, if you want me to answer your questions, answer the ones I already gave you. 3) Is he right about trade deficits being a monetary loss? Is he right when he says that a trade deficit of $X means that we have lost $X in trade and we would be $X richer if we hadn't traded at all? Yes or no.
He says otherwise, explicitly, and so do his actions. But if self-denial is what is required to maintain support of Trump, have at it. I'll continue addressing what he says and does, you continue supporting a fantasy version of him. Keep pretending he's never said we're losing money by trading because of trade deficits, no matter how many times he says it. There's an easy test to see who's right. If I'm right, Trump would be obsessed with the trade deficit. If you are right, he'd be as unconcerned about it as most economists are. Hm, would you look at that. Reality says I'm right. Here he goes again: "Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B." We have a big trade deficit with Canada, I was reading, where, oh, it's actually a surplus. Not a surplus. It's either 17, but it could actually be 100. You know, they put out a document. I don't know if you saw it. They didn't want me to see it, but we found it. Perhaps they were trying to show the power they have. It's close to $100 billion a year loss with Canada" I know it is perplexing that a world leader would be so economically illiterate that he things trade surpluses are monetary, actual surpluses where the county is making money and that trade deficits are monetary, actual deficits where the country is losing money, but Trump's trade philosophy is driven by this kind of stupidity. It is hard to believe that level of ignorance, so I can understand why you don't want to believe it, but facts aren't going to go away just because you don't like them.
Your entire argument is based on your conclusion that he was serious and not joking about something he said but you present no evidence to demonstrate any actions.
He's stated it multiple times. He's acted upon it. Your entire argument is based on playing make-believe that everything he's ever said about trade deficits, which he is completely obsessed with, has been some kind of joke every single time, even though he still acts on it. But you present no evidence to back up your claim that he's just faking everything he says about trade deficits. Tell me where the joke is again (pssst, this is one he acted on, by the way, both by instituting tariffs and trying to challenge Canada over it. But maybe that was just part of the "joke." Yeah, that's the ticket!): "Fair Trade is now to be called Fool Trade if it is not Reciprocal. According to a Canada release, they make almost 100 Billion Dollars in Trade with U.S. (guess they were bragging and got caught!). Minimum is 17B." We have a big trade deficit with Canada, I was reading, where, oh, it's actually a surplus. Not a surplus. It's either 17, but it could actually be 100. You know, they put out a document. I don't know if you saw it. They didn't want me to see it, but we found it. Perhaps they were trying to show the power they have. It's close to $100 billion a year loss with Canada" Or don't and keep playing make-believe.
