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.
Of the 300 million people in this country, how many do you suppose are in the labor force? Do you really believe that Americans would want to drop their high-paying service jobs and take up the lower-paying manufacturing ones so that more of the stuff we consumed would be made in the U.S.? That would be a painful and unwise transition. Mr. Hand (Fast Times At Ridgemont High) was convinced that everyone was on dope; maybe he was right!
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.
And that's always been the struggle between savers and spenders - forgoing current consumption in order to consume more in the future; and vice versa.
Let's be honest, you just made that up.
No, I did not! Foreign central bankers are fueling our economic expansion. If (when?) we become the savers and they the consumers (running surpluses), we'll be fueling their expansions.
It's pretty clear how our trade partners are benefiting, but how are we? Really, if this is such a great idea, you shouldn't be getting so flustered trying to show that.
Living standards (this is the broken record thing again!) Look at how much aggregate wealth is held by Americans and how much is held by the rest of the world, even when repayment of debt (to foreign accounts. Not U.S liabilities to its own people in entitlement programs) is factored in. Our total annual GDP is what percentage of the worlds GDP? (17% I think) And we do it with what proportion of the world's population? (5%) Do pessimists ever see this stuff or does it not mean much?
Still no answer.
I'd prefer to maintain a deficit that stayed at some reasonable percentage of our GDP. However, nothing is ever static and will come back full circle. Times are better during deficit though! Would you like to see the evidence of that as well?
Never said you could. But note that it is your side that is talking about forcing China to unpeg its currency.
It would be nice if China would float but there are disadvantages for them to do it...of course there's many disadvantages to them pegging (stuff that no one discusses) too! Remember, TANSTAAFL.
Like I said, trade deficits only matter when they are improving, otherwise they are meaningless, ie I win.
Depends on how you look at it. There's benefits to being in deficit and surplus. I'll ping you on a post letter when I can find it. Make sure you comment on it.
No, I have read the adult version of Ricardo...
And you gleaned nothing? What was it that you read?