Posted on 03/23/2016 5:35:04 PM PDT by reaganaut1
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Trump is a 200 pound, walking-talking economic fallacy. This is what he bellows in his stump speech:
What is the United States trade deficit with Mexico, Japan and China? Let's start with China. Almost $400 billion per year. If you have a company when you're losing $400 billion you've got to do something very fast. We don't. We've been losing hundreds of billions of dollars per year, frankly for decades. It's not going to happen any more.
It is unclear whether he really believes that a trade deficit is tantamount to “losing” money or whether he’s just saying it because he thinks that’s the level of comprehension of his audience. Either way, it is hard to pack so much stupidity in so few words.
For starters, a trade deficit only means that America — or rather, American companies and consumers — are buying more from China than selling to them. This means we are getting something from China for the money we give it, namely, goods and services that we presumably value more than pieces of paper. In any non-barter economy everyone has a running “trade” deficit with someone and “surplus” with someone. I routinely buy dresses (way more than should be legal, actually) from my dressmaker and sell her nothing at all, but that does not mean I am “losing” money. I get something in return. Maybe Trump is not worried about a trade deficit but a budget deficit. Maybe he thinks we are buying more goods from China than we can afford. But that’s a wholly different issue. When I buy a dress, I can pay for it by: dipping into my savings; working a few hours extra; or taking a loan — none of which has anything to do with the dressmaker.
(Excerpt) Read more at reason.com ...
What Shikha Dalmia fails to acknowledge is that the trade imbalance is the result of many American companies being locked out of China’s markets if they directly compete with concerns in their country. But hey, ignoring that fact helps her sell her position of Trump being illiterate. But I bet most of us, including Ms. Ingenious, wish we were even a tenth as illiterate as Trump when it comes to financial matters.
We’re giving them dollars that have to come back to the U.S. to be spent and they’re giving us stuff for it.
As the article states: you don’t have a ‘deficit’ with everyone you buy from that doesn’t buy the same amount of your stuff.
Trade barriers hurt the country that imposes them.
And Japan? They’re not the reason U.S. automakers don’t make better cars. Increasing the price of cars for all Americans is not going to change that.
The article is a correct assessment of Trump’s economics.
>>>American companies being locked out of China’s markets
If American products are superior or better value, that is China’s loss. Loss to their people, industry and economy.
Trump’s economics - huge tariffs would tax the majority of Americans to benefit the few. Think auto bailout.
Americans would get higher prices, lower standard of living, wages worth less, higher cost doing business, less exports.
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