What a bunch of BS. This country has been running trade deficits pretty consistently for 40 years, but we continue to get richer.
You think exactly like Alfonso Nunez de Castro:
"Let London manufacture those fine fabrics of hers to her heart's content; let Holland her chambrays; Florence her cloth; the Indies their beaver and vicuna; Milan her brocade, Italy and Flanders their linens...so long as our capital can enjoy them; the only thing it proves is that all nations train their journeymen for Madrid, and that Madrid is the queen of Parliaments, for all the world serves her and she serves nobody."
(Prominent Spanish official - Alfonso Nunez de Castro in 1675)
there is absolutely no need for any american kid to be studying engineering anymore, unless they want to compete for their wages with the Indians and Chinese. its a losing proposition, american parents are getting their kids out of the field in droves. US engineering programs would be imploding if not for enrollment of foreign nationals. enrollment in trade schools is booming - plumbers, electricians, auto mechanics.
The history of the balance of payments in the U.S. can be divided up into five stages
Stage I: The U.S. is a young debtor nation (1770-1870) -We have a current account deficit due to the need to import most goods and inability to produce many goods for export. -We have a capital account surplus due to a great deal of foreign investment in the U.S. in the areas of roads, farming, cattle ranches, railroads, and canals.
Stage II: The U.S. is a mature debtor nation (1870-1920) - There is still a current account deficit due to large investment income being paid back to foreign investors based on the investment of stage I. The merchandise account is in surplus -- exports > imports.
Stage III: The U.S. is a young creditor nation (1920-1945) -There is a huge surplus in the current account due to large volume of postwar (WWI) exports. -The capital account is now in deficit due to a great deal of U.S. investment in Europe for postwar reconstruction.
Stage IV: The U.S. is a mature creditor nation (1945-1980) -The current account has a merchandise deficit -- exports < imports but an investment income surplus with a slight net surplus overall. -The capital account is in deficit largely due to postwar (WW II) reconstruction in Europe and Japan.
Stage V: (1980- ) -There is a large (and growing) deficit in the merchandise accounts (The Trade Deficit) and a slight surplus in the investment income accounts. -There is a large surplus in the capital account partially to finance the above merchandise deficit (foreign individuals and banks lending money to individuals in the U.S.) Additionally, since the U.S. has had a low inflation rate since 1982 and consistent economic growth , the U.S. has been a good place to invest relative to the rest of the world. However the current inflow of capital investment could eventually lead to large investment income payments in the near future. The investment income surplus we now enjoy may soon be eroded thus worsening the current account deficit.
We? I know your not talking to me. Maybe some are getting richer, but I sure am not.
This country has been running trade deficits pretty consistently for 40 years, but we continue to get richer.
I feel richer already, don't you? GM to close more plants and cut 25,000 jobs
This is typical leftist thinking isn't it? They do not understand basic economics. Everyone has two accounts. A money account and a capital account. When you purchase goods from another country (or from anyone for that matter), your capital account increases by the exact same amount that your money account decreases. The opposite occurs on their end. It's a net zero transaction. Why do leftists not understand this?
How are we getting richer?