Trade Deficit Shrinks in 2019 (union, expenses, creditors, borrowing)
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Its a convenient myth. The Republicans loved to blame Obama for the budget deficit. I can assure you I am no apologist for Obama whom I consider to be a sock puppet . However please:
Most of the country does not even seem to know it exists.....It ran on this for most of his administration.
I couldn't agree with you more. This is entirely my point. I'm no Obama apologist either (I am a disciple for either side of the aisle), but I am always more than amused at the MAGA wingnuts who changed their tune on the deficit literally overnight when virtually nothing has changed.
The president has little, if anything, to do with the economy's status quo and maybe just slightly more to do with its future through the championing of certain policy. The mere fact of the matter is that the economy improved dramatically under Obama over 8 years, whether anyone likes it or not. If his administration had nothing to do with the recovery, the current one certainly has nothing to do with its continuation. The inverse is the same for the deficit(s).
If it does clearly does not, why does the sentiment on one side or the other change literally with the political wind? Remember, we're talking sentiment here. Reality is a whole other sphere.
Well, fair enough if you want to talk about sentiment, but there is a specific forum for that.
The policy preference for debt financing has been a reality for many, many decades, spanning every possible combination of so-called parties across government, so clearly that is a meaningless detail, and so it is even more meaningless to cackle idly about the past two administrations, a mere flash, which have also operated under different Congresses like every single one of them before. Very clearly none of that inane theatrics has any impact on actual policy.
The national debt is a myth. The cash you carry says note on it for a reason. Its part of the "national debt". It can only be exchanged for another "note" which is a treasury and is nothing more than interest bearing cash,
What matters is industrial capacity and employment. At the individual level its great to be employed. However at the macro level it implies less free capacity.
In fact, during Obama's administration, the national debt was created automatically by automatic stabilizers. It was printed money to cover for private debt deflation. Grid lock just ran the budget on auto pilot.
FYI That 1 trillion in a year was half of what mortgage debt was in 2006 at 2 trillion . And that money was in the hands of the middle class with a huge propensity to spend it on good and service unlike the rent seeking rich.
I couldn't agree with you more. This is entirely my point. I'm no Obama apologist either (I am a disciple for either side of the aisle), but I am always more than amused at the MAGA wingnuts who changed their tune on the deficit literally overnight when virtually nothing has changed.
The president has little, if anything, to do with the economy's status quo and maybe just slightly more to do with its future through the championing of certain policy. The mere fact of the matter is that the economy improved dramatically under Obama over 8 years, whether anyone likes it or not. If his administration had nothing to do with the recovery, the current one certainly has nothing to do with its continuation. The inverse is the same for the deficit(s).
well 2016 was more of a culture war. No matter how much beef and cheese I get, I just cannot support inter-sectional social justice bowel movements.
As for conservatives and republicans vs liberals democrats they are both right 20% of the time but never at the same time with economics. One uses an umbrella rain , no rain, or in a fire storm after 6 months of drought. The other uses 100 different group hug strategies.
Obama has no one to blame but himself. He betrayed his hope and change base and then was easily grid locked by the tea party. No hope and no change. Not one financial criminal went to jail, and he left occupy wallstreet out to dry. I defended many of their positions at the time.......
Trump on the other hand is running an actual policy. Automatic stabilizers are not going to ever get to full employment. 6-8% is probably good. Trump as usual exaggerates the hugeness at 4 trillion in repatriated $USD, but 25% of that boast at $1 trillion is certainly not insignificant. Still going on I think.
I don't have many economic friends because I take advice anywhere from Adam Smith, Milton Friedman and Hayec to Keynes, Marx, and Henry George. I also have a particular liking for post Keynesian with Schumpeter , Iving Fisher and Minsky more applicable to private debt. Endogenous money is how private credit markets work IMHO.
Its a convenient myth. The Republicans loved to blame Obama for the budget deficit. I can assure you I am no apologist for Obama whom I consider to be a sock puppet . However please:
Most of the country does not even seem to know it exists.....It ran on this for most of his administration.
Trade deficit is the topic. The US routinely imports far more than it exports in normal trade. For example, not too long ago almost all semiconductors were made in the US. Now most are made in Taiwan. Most electronics are now made overseas and imported. The importance of this is as things move, the supply chain components that support said industry will also feel pressure to move as well, or at least not enjoy the economies of scale they once did from selling into diverse categories. This can have the effect of driving up costs to the remaining industries.
For example, one would assume that the USA, home of the world's most dominant Navy, would also enjoy a significant commercial shipbuilding enterprise....but it doesn't. Hence the development for Navy ships will bear the entire cost of shipbuilding R&D. The US only mandated parts will not be able to be built at a scale that would be cost efficient and will require more engineering and time in their development.
This was not always the case. As a child, the US enjoyed a predominant trade surplus with the rest of the world. Even after the surplus eroded into negative territory, the talk at the time was that it mattered little as GNP (income as opposed to domestic production) was still positive as Americans owned the enterprises overseas. This quickly also went to negative territory.
On the whole, the trade deficit has shown that for decades now, the US has consumed more than it produces. Were it not that the entire fiscal plumbing is built around the US dollar, any lesser currency would have devalued by now, making imports more expensive and exports more price effective....but because the world runs on dollars, the value of the dollar will stay higher because there is more demand wrapped up in trade unrelated to the US economic activities.
We are still running a massive trade deficit...one that was growing worse each year by some magnitude. A pause in growth and even a shrink is something worthwhile to contemplate....even if it's most likely only the temporary effects of a trade spot with no real hope of stabilizing long term.
The only thing I would ask is did anything happen here? Did anything change with respect to the $USD when the international monetary system changed. I mean should you just keep reading the same Econ 101 text book?
Well, fair enough if you want to talk about sentiment, but there is a specific forum for that.
The policy preference for debt financing has been a reality for many, many decades, spanning every possible combination of so-called parties across government, so clearly that is a meaningless detail, and so it is even more meaningless to cackle idly about the past two administrations, a mere flash, which have also operated under different Congresses like every single one of them before. Very clearly none of that inane theatrics has any impact on actual policy.
Economic conditions are greatly impacted by the sentiment of the humans the economy serves. Therefore, it is clearly not a meaningless detail. Also, the policy was resident during the worst economic downturn since the Great Depression. So, if there is little impact, how did the policy fail so miserably? The answer lies somewhere within what you cavalierly dismiss as inane theatrics.
Trade deficit is the topic. The US routinely imports far more than it exports in normal trade. For example, not too long ago almost all semiconductors were made in the US. Now most are made in Taiwan. Most electronics are now made overseas and imported. The importance of this is as things move, the supply chain components that support said industry will also feel pressure to move as well, or at least not enjoy the economies of scale they once did from selling into diverse categories. This can have the effect of driving up costs to the remaining industries.
For example, one would assume that the USA, home of the world's most dominant Navy, would also enjoy a significant commercial shipbuilding enterprise....but it doesn't. Hence the development for Navy ships will bear the entire cost of shipbuilding R&D. The US only mandated parts will not be able to be built at a scale that would be cost efficient and will require more engineering and time in their development.
This was not always the case. As a child, the US enjoyed a predominant trade surplus with the rest of the world. Even after the surplus eroded into negative territory, the talk at the time was that it mattered little as GNP (income as opposed to domestic production) was still positive as Americans owned the enterprises overseas. This quickly also went to negative territory.
On the whole, the trade deficit has shown that for decades now, the US has consumed more than it produces. Were it not that the entire fiscal plumbing is built around the US dollar, any lesser currency would have devalued by now, making imports more expensive and exports more price effective....but because the world runs on dollars, the value of the dollar will stay higher because there is more demand wrapped up in trade unrelated to the US economic activities.
We are still running a massive trade deficit...one that was growing worse each year by some magnitude. A pause in growth and even a shrink is something worthwhile to contemplate....even if it's most likely only the temporary effects of a trade spot with no real hope of stabilizing long term.
Well there are three reasons. What happens when the US trades with VAT countries? Their exports contain no embedded taxes .All EU taxes are paid by the consumer for example. US exports pay taxes because they are embedded in income taxes. Problem is few people understand the shell game.
Second reason is you cannot have a reserve currency without a trade deficit. When people in the US buy things, dollars leave the country. Yet many of these dollars end up in carry trade and don't buy US goods and services. Others are essentially vaulted and never return. So there is a constant leakage.
Third reason is prosperity causes economic rents to rise( a term discarded by undesirable forces but very prominent in classical economics) . Economic rent is at first concealed . Receipts are not obviously from capital or rent, that is until rent become so profitable that once cease to be a capitalist. The income soon becomes alienated from the raising of capital, and becomes an expense to the capitalist. The US is simply a high rent country.
In what way has the policy of preference for debt financing over tax financing failed so miserably since, say, the 1930s?
Not saying economic policy is optimal at any one time, but what miserable fail?
I would agree.
The 2 times the US economy failed miserably was in the 1870s and the 1930s, the only two times the US was on a gold standard.
I also would not call it debt financing. When ever the government in a fiat money system goes into debt it prints money.
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