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This is utterly fucking futile!!! Don't you understand that other countries in the aggregate simply do not consume as much as we - and our high living standards - do. The accounts DO balance. Whatever they're not buying in goods and services (simply because it wouldn't presumably benefit them to by them) above what we're purchasing from them, goes to the purchase of our assets. It just so happens that they prefer our debt...and this in turn drives down our domestic interest rates which fuels expansion on consumption. If the shoe was on the other foot, there would be benefits there, too. The bottom line is that in the aggregate, we're trading with one another because we're all benefiting somehow (in the aggregate). There's no coercion, it's all voluntary (at least on our end).

What is there such a fucking problem understanding this concept?

Why are surplus and deficit the only choices. If I threw in a 3rd choice - balanced trade - would you still choose deficits? ~ sixmil

So, let's recap: 1) You cannot make other countries buy your goods and services; especially if they have no use for them or there utility functions are not being satisfied by what they'd be spending. 2) Trade balance (or in-balances) are a misnomer. Trade is always balanced when the relevant account are weighed on the double entry accounting style balance sheet. 3) Are you interested in the book or not?

This is utterly fucking futile!!! Don't you understand that other countries in the aggregate simply do not consume as much as we - and our high living standards - do.

Everyone knows that. The question is why are we borrowing money to have people supply our demands rather than doing it ourselves like we used to?

The accounts DO balance. Whatever they're not buying in goods and services (simply because it wouldn't presumably benefit them to by them) above what we're purchasing from them, goes to the purchase of our assets.

You are selling off your assets to buy goods you no longer produce. That sounds more like someone trying to shore up their finances after losing their source of income.

It just so happens that they prefer our debt...and this in turn drives down our domestic interest rates which fuels expansion on consumption.

Let's be honest, you just made that up.

If the shoe was on the other foot, there would be benefits there, too. The bottom line is that in the aggregate, we're trading with one another because we're all benefiting somehow (in the aggregate). There's no coercion, it's all voluntary (at least on our end).

No one said anything about coercion, except you just now. It's pretty clear how our trade partners are benefitting, but how are we? Really, if this is such a great idea, you shouldn't be getting so flustered trying to show that.

What is there such a fucking problem understanding this concept?

Why are surplus and deficit the only choices. If I threw in a 3rd choice - balanced trade - would you still choose deficits? ~ sixmil

Still no answer. Classic political move - make your position centrist then the opposition is extremist.

So, let's recap: 1) You cannot make other countries buy your goods and services; especially if they have no use for them or there utility functions are not being satisfied by what they'd be spending.

Never said you could. But note that it is your side that is talking about forcing China to unpeg its currency.

2) Trade balance (or in-balances) are a misnomer. Trade is always balanced when the relevant account are weighed on the double entry accounting style balance sheet.

Like I said, trade deficits only matter when they are improving, otherwise they are meaningless, ie I win.

3) Are you interested in the book or not?

No, I have read the adult version of Ricardo. I did score in the top .5% on the GRE, if that means anything. Maybe standardized testing is another issue you have a winner take all position on.