CultureCitizen
Silver Member
- Jun 1, 2013
- 1,932
- 140
- Thread starter
- #421
GDP = C + I + G + (X-M)Well, that formula shows that if you make the assumption all else is held equal. The problem as I am pointing out is that all else is not held equal
You're right as far as you go. The role net exports play in this formula represent a direct drag on US GDP growth; an example of an indirect drag on US GDP can be observed by the effects outsourcing has had on Investment's role in growing US GDP. When major US corporations build factories outside the US, they are also reducing the "I" in the formula.
For twenty years the US and EU ran trade deficits with China of well over $200B per year. By 2012 both developed economies were too weak to sustain China's export dependent growth.
From my perspective, we are currently dealing with a long term structural issue of chronic, global trade imbalances that can not be addressed by continuing to enrich the investor class at the expense of the majority.
Because of course the "majority" are not consumers, right? Lower prices don't help the majority? American companies selling more doesn't create jobs? That is where your argument falls apart. Again the irony of your argument is you are actually protecting producers at the expense of consumers, then you conclude the issue are the people who own the producers you are protecting. Think about it...
Now , think about this, what good is that for the majority if basic goods ( housing, food, healthcare, education) are expensive , while the rest of the goods are becoming cheaper ( ipads, iphones, computers, office supplies ) ?