Posted on 09/02/2006 7:09:11 PM PDT by A. Pole
Although most economists keep insisting that their discipline is all about peaceful competition, it’s increasingly clear that they need to do violence to language and logic when defending today’s U.S. globalization policies.
The latest example: Arthur B. Laffer’s recent suggestion in a Wall Street Journal article that the term "trade deficit" is a misnomer. Instead, insisted the "Father of Supply-Side Economics" and former guru to President Reagan, Americans should call their country’s bloated excess of imports over exports a "capital surplus" – reflecting the borrowing from abroad needed to sustain it.
Unfortunately for the United States, word games can’t possibly reduce the dangers created by piling up so much debt, and in the process squandering so much of the earnings capacity needed to restore balance.
But if they really believe such verbal gimmickery reflects reality, the least Laffer and his fans at the Wall Street Journal could do is this: manage their personal finances by maximizing their debts, paying only the interest, and expecting to remain creditworthy and to maintain their high lifestyle because they’re running "individual capital surpluses."
Nails it.
Try selling something she wants to buy.
I think I mis-interpreted your post. Sorry.
To clarify, if Boeing ships one jet airliner for export, that export must be reported by filling out a Shippers Export Declaration (SED) that reports the value of the item being exported. The SED is reported to the Census Bureau.
see: http://www.export.gov/sed.html
If Oracle sells a license for a piece of software, since nothing is shipped (it was downloaded from the net), even if it was for $1 million, no SED is filled out.
While the Boeing sale goes against the trade "deficit", the Oracle Sale does not. Neither do all the license or royalties from the latest Pixar release, or any music sold overseas, as long as nothing in a box, pallet, or envelope is shipped.
So the number published by the Census Bureau is a number, but in light of what percent of US business sales are overseas and not counted because they are not shipped or reported on SEDs, the number is worthless. To the extent that this worthless number influences policy making or even laws and tariffs, it is dangerous to our prosperity.
Glad to see you are off the floor and out of the peanut shells. You are right BTW.
Of course millions of people say the Laffer Curve is bogus, yet it is nothing more then a prime example of the law of diminishing returns.
Holy shit! Batman...
17th C. Spain was not a free-market system, dont'cha know?
OMG!!! "Saturday night and I got nobody"... Can't think of the name of the artist or song.
The hilarious funny irony is that if only the idiots at the American 'Thinker' could use THEIR theory in their own lives they would be running a trade deficit with their local grocery store, their local gas station, their shopping mall and their mortgage company. None of the people I buy things from buy anything from me - and that is okay since other people buy things from me that I don't buy from. I don't have to be stupid and distingeous between those people inside my family and those outside whom I buy things from (especially since those in my family aren't selling me anything).
Dude, we should tray the Japanese anything they want for this young woman. I'll start the bidding if you can find the person who is handling the sale.
Correction to post 23:
Mercedes (not Daimler-Chrysler) recently opened a plant in Alabama. (also, try harder to attract investment capital).
WOW! Time to go to sleep! I need rest and not conjecture right now. It's been a long and tiring day...
Thanks for the pics.. Good night...
Yeah those ladies could cause a loss of sleep alright.
Its all about Oil. If you take oil of this of 'trade deficit' nonsense, we end up with a trade suplus in the tens of billions each month. Our failure to produce our own oil is the single biggest reason for the increase in the trade deficit - just look at the numbers of the last three decades. The second biggest reason would be the incredibly cheap manufacturing costs in China where we buy all kinds of cheap crap that doesn't make any sense to produce here in the US anymore - so we ship more and more of it here to fill up Walmart, 99 cent stores, etc. Its a net plus for the US consumer and the economy since the vast majority of the profit is being made here in the US.
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