I’m sure that if they pout some thought into it, they could find even more meaningless indicators.
IF a business continues spending more money than it makes, then it eventually goes out of business. How is it different with a nation?
“A trade deficit is a sign that Americans have purchasing power and are creating demand for products. When the economy is in a downturn, the trade deficit shrinks. In 2006, for example, the trade deficit was $762 billion and the unemployment rate was 4.9%. By the end of 2009, the trade deficit declined to $384 billion, and the unemployment rate peaked at 10%.”
Real meaning: “We simply ran out of money to give the Chinese so our government could borrow it back!”
Quack Quack Quack
A trade deficit is an indicator that some other country is producing more crap that people in your country want. If the majority of that crap was stuff your country USED to produce, then you have an economic problem and that IS an indicator.
Hogwash
Bunkum
Blather
Balderdash
Bovine Excrement
Horsefeathers
Poppycock
Rubbish
Tommyrot
Twaddle
The trade deficits the US incurs are a massive wealth redistribution from one nation to another.
Two nations have $100.
Nation A spends $50 to make a widget and sells it to nation B for $100.
Nation A now has $150.
Nation B only has a widget that cost $50 to make.
Tomorrow and every day to follow the widget will be valued a little less than the day before.
Is that a meaningless indicator?
Do you want to own, or be owned?
I prefer domestic owners than foreign.
And this explains why nations are rushing to reverse their national trade SURPLUS in favor of A DEFICIT. NOT!!!!
The author should list the countries that have trade deficits with us and their levels to show how they all balance out.
This argument seems to me not just wrong but also dishonest.
Yes, the author does briefly mention that US service and capital accounts are in surplus, but says nothing about what that means.
It means first, that Wall Street and "coastal elites" are doing well while red states' manufacturing atrophies.
But it also means that more & more of America's capital inventory is owned by foreigners.
So is that necessarily bad?
No, not if you don't believe patriotism is a value to be cherished.
If you think putting Americans first is just obsolete hokum, well then sell everything, what do we care?
But if it matters whether we make America great again, that has to begin with making America's economy work for average working Americans.
A reasonable balance of trade is a good indicator of that.
IMHO, YRMD.
IBD SOCIALIST FOOLS
IBD wants other people to pay for their bad deals.
The IBD Invester Business nimwits, buy an IPhone from China, but deceptively it is a FAKE IPhone, a phony empty plastic case. The IBD Socialists want ME & OTHER people to compensate their loss.
Only China charges a Tariff. ONLY China can compensate.
USA has zero Tariff, so nobody can oversee and compensate IBD loss buying their fake products.
The Trade Deficit says USA has NO RIGHTS. Only China has rights. And OTHER PEOPLE must pay for IBD foolishness.
IBD Investor Business nitwits are Socialist Losers.
I supposed industry loss and job loss are meaningless too.
/sarcasm
Thirty to fifty years ago, the stock market went up when the trade deficit went down, and went down when the trade deficit went up. Pretty logical when Americans produced most of what they consumed.
But now that so many US factories and jobs have been relocated to cheap labor nations, an increasing trade deficit means American consumers are buying more US brand products made in cheap labor nations, so transnational corps are earning more and the stock price increases. But, of course, the national debt also increases to make up for the consumption that exceeds what is produced in the US.