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Excerpted from Wikipedia’s article entitled “Balances of trade”.
========================== Trade balances affects upon their nation’s GDP.
========== Annual trade surpluses are immediate and direct additions to their nations’ GDPs.
To some extent exports’ induce additional increases to the GDPs that are not reflected within the export products’ prices; thus trade surpluses contributions to their GDP are generally understated.
Products’ prices generally reflect their producers’ production supporting expenditures. Producers often benefit from some production supporting goods and services at lesser or no cost to the producers.
For example governments may deliberately locate or increase the capacity of their infrastructure, or provide other additional considerations to retain or attract producers within their own jurisdictions. Nations' schools’ and colleges' curriculums may provide job applicants specifically suited to the producer’s needs; or provide specialized research and development. Nations’ entire productions contribute to their GDPs but unless those goods and services are entirely reflected within globally traded products, theses other export supporting productions are not entirely identified and attributed to their nations’ global trade and they do additionally contribute to their nation's economy.
============= Annual trade deficits are immediate and indirect reducers of their nations’ GDPs.
Trade deficits make no net contribution to their nations’ GDPs but the importing nations indirectly deny themselves of the benefits earned by producing nations; (refer to “Annual trade surpluses are immediate and direct additions to their nations’ GDPs”). Among what’s being denied is familiarity with methods, practices, manipulation of tools, materials and fabrication processes.
The economic differences between domestic and imported goods occur prior to the goods entry within the final purchasers' nations. After domestic goods have reached their producers shipping dock or imported goods have been unloaded on to the importing nation’s cargo vessel or entry port’s dock, similar goods have similar economic attributes.
Although supporting products not reflected within the prices of specific items are all captured within the producing nation’s GDP, those supporting but not reflected within prices of globally traded goods are not attributed to nations' global trade. Trade surpluses' contributions and trade deficits' detriments to their nation's GDPs are understated. The entire benefits of production are earned by the exporting nations and denied to the importing nation.
Mitigating trade deficits’ detriments to their nations’ GDPs.
Mitigating trade deficits’ detriments to their nations’ numbers of jobs, median wages and thus their GDPs.
Nations’ annual trade deficits are ALWAYS detrimental upon their numbers of jobs and median wage which are reflected within the nations’ GDPs.
Those detriments are immediate and their drag upon their nations’ entire economies exceeds the amounts of the trade deficits themselves.
Trade deficits are particularly detrimental to their nations’ families dependent upon salaries and wages; (that includes the overwhelming majority of USA’s middle income earners).
To an extent nations’ lesser than otherwise GDPs due to their trade deficits can be mitigated or even overtaken due to their imported production supporting products. It is also conceivable for a nation’s laborers’ aggregate technical, craftsmanship and production superior accomplishments to similarly mitigate their trade deficit’s detriment to their GDP. Conceivably such mitigation could immediately or eventually match or overtake detriments due to trade deficits.
Unfortunately the USA’s trade deficit is not due to imported production support products and has not demonstrated knowledge, craftsmanship and management skills so superior as to eliminate our trade deficits of goods that have been occurring each year in excess of a half century’s duration.
We live in a world where there are a few have's and a lot of have-nots. With success comes responsibility. Part of that is running the trade deficits that enable desperate economies to rely in their turn on export-driven growth.
We live in a world where there are a few have's and a lot of have-nots. With success comes responsibility. Part of that is running the trade deficits that enable desperate economies to rely in their turn on export-driven growth.
Fairlaker, could you be explicit? What's the point of your post?
Fairlaker, could you be explicit? What's the point of your post?
Respectfully, Supposn
Right now China is finally pivoting on their general economic push of these last few decades. They have had huge gains with their economy and people, propelled by central command and massive crony industry/export investment. This has to change for China to move to first world status. i.e. Become more of a consumer/consumption driven economy and thus become 'less desperate'.
[quote=EmeraldCityWanderer;33504183]If these benefits, and detriments, to a nations GDP are understated by everyone who states them...how do you know they are understated?[quote]
Emerald City wanderer, the explanation you seek is specifically provided within the original post of the thread “Annual trade deficits are ALWAYS an immediate detriment to their nation’s GDPs”.
Refer to: //www.city-data.com/forum/econo...t32970309.html
You may also find the second post of that thread which discusses “Mitigating trade deficits’ detriments to their nations’ GDPs” of some interest.
Please post any specific questions, criticism or comments regarding that post.
Annual trade deficits are always (more than otherwise) an immediate detriment to their nation’s numbers of jobs and median wage.
This is true regardless of how well or poorly the nation’s economy may be behaving otherwise.
A nation’s global trade balance is one of many factors that determine the condition of a nation’s economy.
As the original post explains, the producing nation earns all of the benefits due to their productions of products.
A nation’s expenditures for imported goods do not in themselves contribute anything to their economy. (We cannot spend the same dollar twice); the nation then in effect has declined to spend their wealth in a manner that would contribute to their nation’s economy.
Emerald City wanderer, the original post also explains how and why prices of some goods may not reflect the entire expenditures of all goods and service products that support the production of more final products; (i.e. individual products prices may be understated).
Although nation’s entire productions are attributable to the producing nation, the prices of their globally traded goods themselves, (i.e. their imported and exported goods) are likely in aggregate to some extent understated.
There’s no method to indentify and quantify all or the extent of a nation’s understated imports or exports; but it’s certainly occurs within global trade.
We live in a world where there are a few have's and a lot of have-nots. With success comes responsibility. Part of that is running the trade deficits that enable desperate economies to rely in their turn on export-driven growth.
Fairlaker, USA benefits from cheaper priced imports but it doesn’t compensate for trade deficits detriment to our numbers of jobs and our median wage’s purchasing power.
I am unwilling to trade off the best interests of USA’s economy; our trade deficits net detrimental effects are particular borne by USA’s employees and their families for the benefit of nations that are unable or unwilling to better enable the compensation of their own laborers.
If these benefits, and detriments, to a nations GDP are understated by everyone who states them...how do you know they are understated?
Emerald City wanderer, the explanation you seek is specifically provided within the original post of the thread “Annual trade deficits are ALWAYS an immediate detriment to their nation’s GDPs”.
Refer to: //www.city-data.com/forum/econo...t32970309.html
You may also find the second post of that thread which discusses “Mitigating trade deficits’ detriments to their nations’ GDPs” of some interest.
Please post any specific questions, criticism or comments regarding that post.
Annual trade deficits are always (more than otherwise) an immediate detriment to their nation’s numbers of jobs and median wage.
This is true regardless of how well or poorly the nation’s economy may be behaving otherwise.
A nation’s global trade balance is one of many factors that determine the condition of a nation’s economy.
As the original post explains, the producing nation earns all of the benefits due to their productions of products.
A nation’s expenditures for imported goods do not in themselves contribute anything to their economy. (We cannot spend the same dollar twice); the nation then in effect has declined to spend their wealth in a manner that would contribute to their nation’s economy.
Emerald City wanderer, the original post also explains how and why prices of some goods may not reflect the entire expenditures of all goods and service products that support the production of more final products; (i.e. individual products prices may be understated).
Although nation’s entire productions are attributable to the producing nation, the prices of their globally traded goods themselves, (i.e. their imported and exported goods) are likely in aggregate to some extent understated.
There’s no method to indentify and quantify all or the extent of a nation’s understated imports or exports; but it’s certainly occurs within global trade.
Respectfully, Supposn
Yes, you can say that over and over again...but simply saying it doesn't prove it. I can say a 40 foot long dragon is living in my backyard, or we are all in the Matrix projected from the moon, but the burden of proof is on the person making the claim that they can prove it true. Can you provide the evidence this is true instead of just claiming that it is and referencing back to this thread over and over?
Fairlaker, USA benefits from cheaper priced imports but it doesn’t compensate for trade deficits detriment to our numbers of jobs and our median wage’s purchasing power.
I am unwilling to trade off the best interests of USA’s economy; our trade deficits net detrimental effects are particular borne by USA’s employees and their families for the benefit of nations that are unable or unwilling to better enable the compensation of their own laborers.
Respectfully, Supposn
I think that this conundrum is related to capitalism in general. It is not a perfect system. As we progress with technologies and continue forward with further pursuits of more profit, there is less need for many laborers. And this happens more as a result of owner/shareholder compensation before any specific rewards to foreign laborers.
We could as a nation go with import tariffs and other foreign trade restrictions. We could go with rewarding companies for hiring and manufacturing within our borders. But these suggestions create other problems on their own.
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Mitigating trade deficits’ detriments to their nations’ GDPs.
