Here are the facts:
Gross Domestic Product (GDP), the measure of the USA's output of goods and services, is calculated by the Commerce Department's Bureau of Economic Analysis using the following items:
- Personal consumption expenditures: Personal consumption expenditures are far and away the largest and tends to be the most stable of the four expenditures, averaging about 65-70% of gross domestic product.
- Gross private domestic investment: Expenditures on capital goods to be used for productive activities in the domestic economy that are undertaken by the business sector during a given time period. Gross private domestic investment tends to be the least stable of the four expenditures, averaging between 12-18% of gross domestic product.
- NET EXPORTS OF GOODS AND SERVICES Net exports of goods and services is the smallest of the four expenditures, averaging around 2% of gross domestic product. Unlike the other expenditures, net exports of goods and services can be either positive or negative. They are positive when exports are greater than imports (Trade Surplus) and negative when exports are less than imports (Trade Deficit). In recent years, net exports of goods and services have been negative.
- Government consumption expenditures and gross investment measures government purchases undertaken by the government sector. Government consumption expenditures and gross investment averages between 15-20% of gross domestic product. This percentage tends to be ebb and flow a little with the political winds.
The BEA News Release for FOURTH QUARTER 2004 provides us with the following current data for these items. (Seasonally adjusted at annual rates)
Gross domestic product (GDP)............................. $11,728.0 billion
Personal consumption expenditures.......................... 8,231.1 (70.18% of GDP)
Gross private domestic investment.......................... 1,922.4 (16.39% of GDP)
Net exports of goods and services........................... -609.3 (-5.19% of GDP)
Government consumption expenditures and gross investment... 2,183.8 (18.62% of GDP)
The current BALANCE OF TRADE is in deficit, which is considered unfavorable.
And at historic highs, it diminishes our domestic economy by over 5% - more than twice the normal variation. This is NOT insignificant.
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To: Willie Green
This pattern is not seen elsewhere. Per capita income in Europe and Japan is on a par with America. The European Union actually has a larger combined economy than does the United States, with Japan in third place. Both the EU and Japan run trade surpluses, and in fact use their large gains in the U.S. market to boost their own economic output and income
So lets see..... Japan just went into recession, Germany has 10% unemployment and -.2% growth, France has 10% unemployment and 0% growth, and Spain's economy is shrinking under the EU and the new PM. The good news is those countries have a trade surplus, and everyone of those countries would trade their economy for ours in a heart beat. As far as China goes the banking system is carrying huge, I mean really huge debts from non performing loans. The Chinese govt just pumped 45 billion into the banking system to keep it a float.
81 posted on
02/18/2005 11:03:54 AM PST by
ghitma
(MeClaudius)
To: Willie Green
Snow apparently assumes that Americans will spend most of any increase in income on imports rather than on American made products. Why would this be true unless American firms are being beaten out by their foreign competitors? We are being beaten. That's why we don't make anything in America anymore.
![](http://www.ncpa.org/pub/ba/ba456/figure-.gif)
95 posted on
02/18/2005 11:21:45 AM PST by
Toddsterpatriot
(Protectionism is economic ignorance!)
To: Willie Green
He's baaaack
To: Willie Green
Another whacko article from a two bit website.
112 posted on
02/18/2005 11:51:16 AM PST by
Protagoras
(Un-apprehended criminals have no credibility when advocating for the WOD)
To: Willie Green
Willie, we went through all sorts of announced future disastrous phases.
Recall the time when you couldn't attend a meeting without getting scared of the upcoming interest rate jump that kills it all.
There were full page ads in the NYT informing the public. These informericals were signed by a whole slug of scientists, economists, Nobel winners, and as a crown jewel the Democratic economic saint Mr Rubin confirmed this.
Then came the scare of a growth economy without the need for people. One self appointed economic expert and candidate promised 10 million new hires, but belittled and berated a sitting President when he announced 2 million new jobs in 2004. No apology by critics for exceeding these 2 million new jobs, just stepping to the next dooming disaster.
It's the deficit.
In my humble mind, a deficit has to be in relation to the total size of business, in this case the GDP, or Gross Domestic Product. And here, we find it to come down from the 3.6% it was 6 months ago.
Compare the U.S. with Germany, the third largest economy worldwide.
These people have a 3.6% deficit but not coming down, no it's going up, besides a 12.1% unemployment rate, still going higher.
Wouldn't it be silly not to have a declining and only 5.2% unemployment rate, and pumping unemployment onto the European plateau by radically jacking up taxes and attempting to pull down this deficit radically that is the support of staying employed.
If employment continues rising, the deficit automatically keeps diminishing along with economic growth.
No scare tactics needed, just keep watching what's happening by staying on course.
115 posted on
02/18/2005 11:55:25 AM PST by
hermgem
To: Willie Green; Dog Gone; Grampa Dave; Southack; Steven W.
130 posted on
02/18/2005 12:12:31 PM PST by
SierraWasp
(The Dems have lost whatever "redeeming social value" they ever had!!! Just ask Zell...)
To: Willie Green
Well, I note that I spend lots more money at Publix Supermarkets than they spend on me. That must mean I'll be going down the tubes to economic defeat pretty soon.
141 posted on
02/18/2005 12:26:58 PM PST by
Sam Cree
(Democrats are herd animals)
To: Willie Green
Mr. Hawkins said:
"This [large trade deficit] is a situation usually associated with underdeveloped countries on the brink of financial collapse."
THAT is a FALSE STATEMENT, rather easily disproved.
And Mr. Hawkins also said:
"The Bush Administration is ideologically opposed to doing anything about the deteriorating international situation."
THEREBY exposing his own ideological "agenda" -- since the recent decline in the dollar is hardly a secret.
So, what you're pushing here, Willie, is "Junk Economics".
Maybe you need to spend a few days enjoying the economies of such "Workers' Paradises" as Germany and Japan.
Oh? What's that? High unemployment and economic recessions do NOT fit your definition of "workers' paradise"?
Well, then...
Back to the "ole drawing board" for you, eh?
142 posted on
02/18/2005 12:27:30 PM PST by
pfony1
To: Willie Green
Record US Trade Deficits Spell Impending Economic Defeat
HA HA HA HA HA HA HA HA.
We buy lots of things way cheaper than we could buy them if produced domestically (which means we have both the goods as well as extra money to spend on other things, even domestically-produced things) and give the sellers money that they can't use in any other way than to buy U.S. goods and services.
145 posted on
02/18/2005 12:28:24 PM PST by
aruanan
To: Willie Green
Mr. Hawkins said:
"This [large trade deficit] is a situation usually associated with underdeveloped countries on the brink of financial collapse."
THAT is a FALSE STATEMENT, rather easily disproved.
And Mr. Hawkins also said:
"The Bush Administration is ideologically opposed to doing anything about the deteriorating international situation."
THEREBY exposing his own ideological "agenda" -- since the recent decline in the dollar is hardly a secret.
So, what you're pushing here, Willie, is "Junk Economics".
Maybe you need to spend a few days enjoying the economies of such "Workers' Paradises" as Germany and Japan.
Oh? What's that? High unemployment and economic recessions do NOT fit your definition of "workers' paradise"?
Well, then...
Back to the "ole drawing board" for you, eh?
149 posted on
02/18/2005 12:32:52 PM PST by
pfony1
To: Willie Green
"The first law of economics is that there is never enough to go around; wants are unlimited while the ability to satisfy those wants is limited at any point in time" I couldn't finish reading the article once I got to this untrue statement in the sixth paragraph.
There is always enough to go around and the scarcity is alwasys allocated efficiently by the price mechanism.
That is what the "trade deficit" is: a price mechanism.
All of the countries that are getting dollars from their sales to the U.S. will now have increased their wealth.
Because of the large amount of dollars in foreign countries this will make US goods "cheap," and subsequently demand for US goods will rise.
That demand then will be satisfied by increasing production in the US. More jobs; greater wealth will result in the US.
So, just calm down. The inevitable laws of supply and demand will bring the trade deficit/surplus into equilibrium.
187 posted on
02/18/2005 3:53:29 PM PST by
tahiti
To: Willie Green
When you owe the bank $1000 and can't pay, you are in trouble.
When you owe the bank $1,000,000,000,000 and can't pay, the bank in trouble.
To: Willie Green; Wolfie; ex-snook; Jhoffa_; FITZ; arete; FreedomPoster; Red Jones; Pyro7480; ...
Brooks warned against the classical economists dogma of free trade. "Now men are apt to lecture on political economy as if it were a dogma, much as the nominalists and realists lectured in medieval schools. But a priori theories can avail little in matters which are determined by experiment....No one can say a priori what will succeed; the criterion is success." By this standard, U.S. trade policy is a failure, no matter how many academic economists claim it should be working in theory. Free trade bump!
203 posted on
02/18/2005 6:25:14 PM PST by
A. Pole
(Hush Bimbo: "Low wage is good for you!")
To: Willie Green; All
It just keeps on getting
Worse.
204 posted on
02/18/2005 6:32:55 PM PST by
NRA2BFree
(NO AMNESTY, NO UN, NO PC, NO BS, NO MSM, NO WHINY @SS LIBERAL BEDWETTERS, NO LIBERAL JUDGES! YEAH!)
To: Willie Green
208 posted on
02/18/2005 6:50:45 PM PST by
sully777
(It's like my momma always said, "Two wrongs don't make a right but two Wrights make an airplane.")
To: Willie Green
As America writes off more and more industries and stops competing with foreign companies, we lose not only the maufacturing side of it but also engineer, scientists and tech people who would have worked in Reasearch and Development for those products/industries.
That is one of the big negatives.
I do see something positive about the huge trade deficit:
All the blue collar, undereducated class may finally get off their lazy asses and start taking night school courses to get certified (or get a degree) in a high tech profession that is more insulated from our manufacturing base going overseas.
Also, the damn schools may be forced to start teaching more math and science and computer courses in the high schools to better prepare our studnets to work in the 21st century.
212 posted on
02/18/2005 7:27:54 PM PST by
Dont_Tread_On_Me_888
(John Kerry--three fake Purple Hearts. George Bush--one real heart of gold.)
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