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Old 05-17-2019, 12:36 PM
 
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Quote:
Originally Posted by EDS_ View Post
Trade deficits do matter, net trade is in our best GDP calculations. It's just wantonly absurd for anyone to claim the trade deficits don't matter or amount to much.
EDS, you're agreeing with my position and opposing the positions of those credible economists that are advocates of pure free trade.

You don't find credible economists contending that trade deficits are beneficial to their nation's GDP. But among credible economists that are advocates of pure free trade, you find contentions that they're proportionally not of no substantial detriment to USA's goods and services production.

Respectfully, Supposn

 
Old 08-07-2021, 03:17 PM
 
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If country dont make or do anything anyone else wants, but keeps receiving other countries goods somehow, they will run out of money or bidding power because said nation is not bringing anything of value back to trade with.

You can make the same analogy to a person. If I, for example, dont make any money or produce any to barter with but keep buying other people's stuff, I will go bankrupt, and homeless eventually.
 
Old 08-07-2021, 03:21 PM
 
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Quote:
Originally Posted by 6oo9 View Post
Using tariff for trade war with China is a bad idea. That’s thinking China too much, ignoring domestic impacts. “Economists” who support that idea must be idiots, not even politicians. We’d seen stock market down in 2018, Dow still can not get above 26,000.
All things being equal, tariffs are good as long as you have domestic production and are trying to protect it.
 
Old 08-07-2021, 03:41 PM
 
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Quote:
Originally Posted by Mircea View Post
Blah, blah, blah, same old drivel and you can't even name one.



His. He has no training or experience in Economics or Business or Marketing or Finance.



He's going to give a link to a Pukipedia article he wrote about Import Certificates.

His lame argument is predicated entirely on the false belief that $1 of Imports equals $1 of GDP, in spite of the fact that in the history of Earth, that has never been true for any country.

In the US, $1 of Imports generates up to $20 in GDP, and sometimes more than that.

Take plastic kitchen utensils. They're $0.05 each factory to shelf. The Dollar Tree sells them for $1 each, so $1 of Imports is 20 plastic kitchen utensils that create $20 in GDP.

He just can't wrap his brain around that.

He also doesn't understand that for each country, Domestic GDP is capped, largely due to inherent limitations in population.

Assume Domestic GDP in the US is capped at $14 TRILLION. You import $600 Billion in goods and generate $3 TRILLION in GDP.

Are you better off or worse off?

Clearly, you're better off.

Even if you exported absolutely nothing, your NET GDP is $16.4 TRILLION and you're still better off.

He doesn't understand trade-offs, either.

You're manufacturing plastic kitchen gadgets and electronic goods. Electronic goods generate more profit, enhance people's lives, may be exported for more profit, and workers are paid more.

You want to expand your production capacity for electronic goods, but you can't, because you don't have the labor.

The smart move is to off-shore plastic kitchen gadgets. Let China, Vietnam, Taiwan, South Korea, Romania or India make them.

That frees up labor to increase the production capacity for electronic goods.

There are no losers here. Everyone's a winner.

He fails to understand that in order to produce everything Americans want, you would need to more than double the population of the US to more than 750 Million people, just in the hope of having sufficient labor to produce everything.

Labor is not about numbers, it's about skill-sets, and the government identifies 800+ skill-sets.

Take doctors.

All surgeons are doctors, but not all doctors are surgeons, nor could they be, because surgery isn't and never will be part of their skill-set.

Only a fraction of doctors have the surgeon skill-set, but not all want to be surgeons, so there's even fewer surgeons. Janitors cannot teach surgeons, only other surgeons can teach surgeons, but teaching is a separate skill-set unto itself that few people possess, and even fewer surgeons possess the teaching skill-set, and of those, even fewer who actually want to teach. So, there are inherent limitations for most skill-sets, and there's no way to get around that.

So, yeah, you might have 157 Million workers and another 6 Million looking for work, but not all of them have the manufacturing skill-set, and of those that do, not all want to work in manufacturing regardless of the wage paid, and then how many of those are in the vicinity of a manufacturing facility to actually work?

It's a lot more complicated than he thinks.
How are people suppose to afford all that up charge if nation as a whole is spending out more than it is selling?

As for the cheap plastic forks vs Electronics analogy; how can be better when everyone in a nation is doing the same thing? That is making electronics. Look at Venezuela. Major part of economy was Petroleum, hardly any diversity.

Can you show us proof of the "double population to produce all goods Americans need", or some article that explains that in depth?
 
Old 08-07-2021, 04:04 PM
 
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Quote:
Originally Posted by Astral_Weeks View Post
Trade deficits are not a sign of economic trouble, and trade surpluses are not necessarily a sign of economic health.

The last time the U.S. ran a trade surplus with the world was 1975, when our economy was in a shambles. The US ran surpluses all through the Great Depression of the 1930s, with both imports and exports lower than 1920s levels.

One of the reasons the United States of America is such a relatively wealthy country is that it maintains a free trade zone among its 50 states.

But shouldn’t Florida help out Minnesota by importing just as many oranges from Minnesota as Minnesota imports from Florida? Trade flows should be unequal. … if you pick any one state in the United States and look at its trade position with respect to other states, you’d see a lot of deficits and surpluses.

There is no more reason to expect that we Americans will over time sell as much to the Chinese as we buy from the Chinese than there is to expect that, say, General Motors will over time sell as much to Goodyear as General Motors buys from Goodyear. And just as General Motors would be foolish to restrict its purchases from Goodyear on the grounds that Goodyear annually spends less on outputs sold by G.M. than G.M. spends on outputs sold by Goodyear, it would be foolish for us Americans to restrict our purchases of outputs sold by the Chinese on the grounds that the Chinese annually spend less on exports from the U.S.
There are other factors affecting the economy. Having one positive factor may be overtaken by negative factors. Would you say that having a trade deficits would be even better during the Great Depression, or 1975?

Minnesota, and Florida are in the same nation. Free trade zone with an entirely separate country with a dissimilar system is going to be vastly different.
 
Old 08-07-2021, 04:31 PM
 
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If you can create your own raw materials and finished product, it will have the same effect as importing. And if you export said raw materials, you will keep the long distance transport jobs.

Any where you go, you will replace some kind of plant, if you are trying to meet the demands for some other plant.

Importing goods also means job losses in the manufacturing center, and importing more labor means increase in supply. Both which drives wages down because less jobs, and more people to fill them.
 
Old 08-13-2021, 06:09 PM
 
4,873 posts, read 3,572,760 times
Reputation: 3881
Imagine if the US had zero GDP, nobody had to work and we all lived in luxury off of Chinese-made imported goods that they gave us in exchange for currency i.e. imaginary numbers. What a disaster that would be.
 
Old 08-16-2021, 09:33 AM
 
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Quote:
Originally Posted by Supposn View Post
FrankMiller, many, (I would suppose most) economists believe a greater GDP per capita indicates a comparatively higher standard of living. I'm unaware of any economist contending a lesser GDP per capita is not indicative of comparatively lower living standards.

Is it possibles that a trade policy that promotes USA's chronic great annual trade deficits, to also positively contribute to our nation's economic well being? It's illogical to contend USA's trade deficits which reduce our annual GDPs more than otherwise, are net beneficial to our nation's economy.
What logical reason would lead to concluding if our nation would strive to produce less goods and service products, but rather increase our purchases of imports, that would be to our economic improvement?
Respectfully, Supposn

Economists understand that GDP is a measure, not reality. It is useful but it has its limits. If you and your spouse started paying each other $50k per year to do chores the US GDP would go up by $100k. Would it be fair to say US living standards had also gone up?


The point is, when you talk about the trade deficit and economic improvement, what do you actually mean? You're debating measures and simplifications, but what are you actually talking about in material terms? When the US changes a number in a spreadsheet to make a boatload of smartphones show up in Seattle, who is hurt and how?
 
Old 08-25-2021, 05:04 PM
 
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Quote:
Originally Posted by Supposn View Post
Frank Miller, the methods for calculating GDP provide results similar to the VAT taxes upon final goods and service products. The analogy is GDP's similarity to value added taxes. VAT, the superior method for generally administering sales taxes, calculates the tax upon the "value added" to products within each link of the transaction chains.

No, in the scenario you provide, (even if there were records of somewhat similar transactions), those transactions would not create additional GDP if they did not create additional final sales of some goods or services, (ie. additional final production). That's why exports increase, and imports decrease their nations' GDPs.
Respectfully, Supposn
The spouses in my example are selling services to each other. If it helps, assume that the wife does the housework, then divorces her husband and starts an LLC which sells housework services to the ex-husband at some rate. How would that not be counted as part of GDP?
Quote:
Originally Posted by Supposn View Post
can you explain how lesser GDP per capita can not be economically detrimental to our nation?
GDP is a measure, not reality. If our needs are being met, you can't then point to GDP and say our needs aren't being met.


The question I have for you is, without resorting to abstract measurements, can you explain what needs are not being met?
 
Old 08-30-2021, 07:31 AM
 
4,873 posts, read 3,572,760 times
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Quote:
Originally Posted by Supposn View Post
FrankMiller, within your further described scenario: The wife' tax filing LLC would in fact have reflected an additional $50K of service products within USA's GDP;

if the husband acted in a similar manner, he also would have produced an additional $50K of service products;

They and their LLCs' would have been subject to all of the taxes generated by their production and sales of additional $50K or $100K values of service products.

A couple behaving in such a manner, (I suppose) would be satisfying their need to be foolish. GDP statistics are reports rather than judgments. They do not favor medical doctors' or disfavor strip-club employees' services. "Needs to be met"? Available well paying jobs are not needed by USA's wage earning families? Lesser annual USA GDP indicate fewer USA jobs; that's reality. What's your point?
Respectfully, Supposn
Why do we need jobs?
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