Replies

"During a recession, people spend less on goods and services, including imports."

That part I can follow you because it's just like what I said in post 55 "the bigger the trade deficit, the better off we are." The part where you lost me was with "Do you believe that every year from 1976 to now was more prosperous than every year from 1896 to 1970 and that, judging by our current record deficits, we are now approaching economic nirvana?"

Where to begin. Aw heck, I can't imagine you or anyone else ever wanting to live like they did back in the 1800's --I personally know people who do and-- it ain't pretty. How about you and I try and agree on an index of prosperity for comparing standards of living in 1896 with today lifestyles--- nah, can't happen.

I guess it's simply not a good idea to post ideas just before dawn on a Sunday morning. I tried to respond immediately to you this morning but what I was typing came out like "Do you believe that every year from 1976 to now was less prosperous than every year from 1896 to 1970 and that, judging by our current capital account surpluses, we are now approaching economic perdition?" Like, that just doesn't even make any sense.

The part where you lost me was with "Do you believe that every year from 1976 to now was more prosperous than every year from 1896 to 1970 and that, judging by our current record deficits, we are now approaching economic nirvana?"

Following is the definition of prosperous as given by the Merriam-Webster Online Dictionary:

1 : AUSPICIOUS, FAVORABLE
2 a : marked by success or economic well-being
  b : enjoying vigorous and healthy growth : FLOURISHING

I am of course using definition 2b. In terms of wealth, at least that wealth that results from technology, we are naturally better off now than we were in 1900 and will almost surely be better off in 2100 than we are now. But, in terms of growth, every year from 1976 to now was obviously not better than every year from 1896 to 1970. Likewise in those terms, your statement that "the bigger the trade deficit, the better off we are" is obviously not true.