The U.S. Trade Deficit Is Not A Debt To Repay

Forbes ^ | Mar 22, 2016 | Dan Ikenson

[expat_panama]

Questions for the group:

1. If the trade deficit is like the national budget deficit, then how come we got a total national debt (right now HERE at $19,205,597,413,856.96) but nowhere is there an accumulated "national trade debt"?
2. If our dollars are going over seas and not coming back, just what is the rest of the world doing with all those dollars?
3. Everyone cares about international trade in goods and services, but what about the other half of international trade in other stuff like construction, land, designs, etc.?
4. Why is it that U.S. employment goes up when the trade deficit gets bigger?

[cba123]

US employment is not going up.

That is a total, complete fabrication.

Big time.

[Buckeye McFrog]

The public increasingly does not believe that ANY deficit is a debt to repay.

[circlecity]

"If our dollars are going over seas and not coming back, just what is the rest of the world doing with all those dollars?"

Look at the stock market.

[henkster]

The article is technically correct; tbe trade deficit is not a “debt to repay.” It is, however, an exportation to or an appropriation of or national wealth by other nations. All those dollars going overseas come back and buy our land and all of the assets on it.

Try to make a movie in Hollywood critical of Saudi Arabia or China. Not gonna happen. Guess who owns and finances the studios.

[expat_panama]

US employment is not going up.  That is a total, complete fabrication.

You don't believe the employment numbers, however you chose to accept those made up fabricated trade deficit numbers.  They all come from the same people, why the one one and not the other?

[Trumpinator]

To simplify it fr the free traitors - the dollars that go in trade then get loaned back to the USA or spent on other countries (China is buying up African natural resources for example). The dollars spent that goes to say a China that do get returned to the USA that do not buy American goods and services is loaned to the USA by ourchases if treasury bonds. That adds insult to injury that the money spent on Chinese goods is then loaned back to the USA adding to our budget defecit. And we need to borrow because the tax base declines - any new jobs add are low paying service jobs.

[bert]

the trade deficit is definitely not a loan

the trade deficit is not sovereign

the trade deficit doesn’t matter

BTW, with China, the money is infact coming back in the purchase of stocks and real estate by Chicap investors.

[expat_panama]

what is the rest of the world doing with all those dollars?"

Look at the stock market

That's true, it's like when I sell my Sony stock to a Canadian at a huge profit and then I use the Canadian dollars to buy Canadian gasoline.   That's a trade deficit and I really don't see what's wrong there.

[norwaypinesavage]

"If Noah Smith and other economists worry about this debt, they should advocate reducing wayward government spending instead of restricting trade."

Amen!!!

I can remember a few decades back how angry some were that "The Japanese were buying up America. They even owned The Rockefeller Center!" Well, guess what. The Rockefeller Center is still here.

Then it was the South Koreans, the Indonesians, and now the Chinese. And yet,.....The Rockefeller Center is still here. No matter how high the tariffs Trump places on the Chinese, the buggy whip factories will still be closed.

[expat_panama]

...with China, the money is infact coming back in the purchase of stocks and...

Exactly, it's like in my post #9

[cba123]

The thing is, China is buying American companies.

American companies however, cannot buy Chinese companies.

Not a good deal, for America.

[expat_panama]

an appropriation of or national wealth by other nations. All those dollars going overseas come back and buy our land and all of the assets on it.

Whoa --all the land and all the assets in the U.S. have all left!!!

We know that's not true.  We know it's like what I said in post 9 about swapping Sony stock for gasoline in Canada.

[Mouton]

In real estate a good point to note is when the top of the market is reached is when the foreigners are buying.

[Mouton]

The “money” or “trade units” or whatever you wish to call them are being used between nations as a base currency. You wish to deal in goods outside the US, you need buy dollars to do that to effect the exchange. That is where the money is. These trading units are not currency as much as some see them.

The dollar right now seems to be peaking or just past its peak. This dollar supports our debt. When it goes past any point of equilibrium with other money, the US will have no choice but to raise the interest rates to “support” the dollar. When that happens it will be game over.

[Last Dakotan]

Future American generations will see a serf-like existence. Forced to pay back huge loans their entire lives without the ownership of any productive assets.

[expat_panama]

American companies however, cannot buy Chinese companies.

A lot of people have been saying that on the FR for quite a while, and in the mean time the rest of us have say, bought BIDU at $140 six weeks ago and are now selling it at $190.  Yeah, I know folks here can say that my paying my money to own the company and having others want to pay big money to buy it from me --that's not really really really "owning" the company. 

Whatever.

[bert]

The largest IPO (Initial Public Offering) in the history of the New York Stock Exchange was a Chicap company called Alibaba Holding

Alibaba is first of all at the root an ebay and Thomas Register for business to business transactions. Alibaba has also many big irons in the internet fire.

[bert]

there are very active Chicap stock exchanges and the largest IPO in history of the NYSE was a Chicap company

Better check your facts

[jospehm20]

“just what is the rest of the world doing with all those dollars?”

You mean besides China financing their military buildup?