Dems say "trade deficits don't matter"....lets debate that stupid position

[kyzr]

I readily that a trade surplus is NOT the ONLY factor that determines a strong economy, and a trade deficit a weak economy. There are many other factors involved, such as currency, comparative advantage, labor rates, skilled labor, natural resources, various regulations, political stability, roads, factories, capital investment, taxes, population, population income, etc....

That is a good start.

I see your point, the US economy is humming along at ~3%, thanks to the tax cut and reduction in regulations, so things look okay on the surface.

The US economy is humming at the same rate it has been for the last 6 years, nothing changed in the last two.

But, with wages stagnating for decades, and thousands of factories moving overseas how long until we turn into Mexico, where there are billionaires and peons?

Wages are stagnant that is for sure. 80% of the factories jobs lost in the last 20 years are due to automation, not moving overseas. We will never turn into Mexico unless you statist have your way and get the government even more involved in our lives. Factory jobs are no longer the cash cow for people that they once were, times change people need to adapt.

So how can the US address the Debt? Grow the economy, and reduce entitlements and military spending. How best to grow the economy? Create better paying jobs, and develop new products.

We do not have an income problem in this country, we have a spending problem No growing will outpace our spending. And nobody, not even Trump is calling for reduced spending in both entitlements and military

Then the US is screwed. Trump's game plan seemed to be to grow the economy and get back to a balanced budget. The following article looks pretty grim. No wonder Ryan bailed...
Analysis of CBO’s April 2018 Budget and Economic Outlook

Where did you get the idea that Trump wanted a balanced budget? He has not called for spending cuts, just spending more money in different areas. The tax cuts have also exacerbated the problem by slowing revenue growth. After a record braking April that was driven by people like me sending the Feds a check to cover the part of our tax burden that payroll deductions did not cover from the previous year, May and June have seen less revenue generated than the May and June of 2017. That is not good at all.

If Trump doesn't want a balanced budget, then the Joint Chiefs and the major players in Congress do. The current fiscal mess really needs to be addressed. The article below says that we need to average a 2.8% growth rate for the next 10-years to get to a balanced Budget by 2028. That doesn't sound crazy, but if we act like grownups, the individual tax rates expire in 5? years. Then we could raise taxes on just the top 1%-5% of incomes and have tax incentives like taxing short sellers and stock traded too quickly, as well as raising the retirement ages from 62/66 to 63/67. Also, we could improve Medicare by hammering cheats very severely. Bottom-line, we need to average 2.8% for the next 10-years and tweak entitlements. Also, avoid unnecessary wars...

It Would Take Nearly Unprecedented Economic Growth to Balance the Budget

 

[Harpy Eagle]

I readily that a trade surplus is NOT the ONLY factor that determines a strong economy, and a trade deficit a weak economy. There are many other factors involved, such as currency, comparative advantage, labor rates, skilled labor, natural resources, various regulations, political stability, roads, factories, capital investment, taxes, population, population income, etc....

That is a good start.

I see your point, the US economy is humming along at ~3%, thanks to the tax cut and reduction in regulations, so things look okay on the surface.

The US economy is humming at the same rate it has been for the last 6 years, nothing changed in the last two.

But, with wages stagnating for decades, and thousands of factories moving overseas how long until we turn into Mexico, where there are billionaires and peons?

Wages are stagnant that is for sure. 80% of the factories jobs lost in the last 20 years are due to automation, not moving overseas. We will never turn into Mexico unless you statist have your way and get the government even more involved in our lives. Factory jobs are no longer the cash cow for people that they once were, times change people need to adapt.

So how can the US address the Debt? Grow the economy, and reduce entitlements and military spending. How best to grow the economy? Create better paying jobs, and develop new products.

We do not have an income problem in this country, we have a spending problem No growing will outpace our spending. And nobody, not even Trump is calling for reduced spending in both entitlements and military

Then the US is screwed. Trump's game plan seemed to be to grow the economy and get back to a balanced budget. The following article looks pretty grim. No wonder Ryan bailed...
Analysis of CBO’s April 2018 Budget and Economic Outlook

Where did you get the idea that Trump wanted a balanced budget? He has not called for spending cuts, just spending more money in different areas. The tax cuts have also exacerbated the problem by slowing revenue growth. After a record braking April that was driven by people like me sending the Feds a check to cover the part of our tax burden that payroll deductions did not cover from the previous year, May and June have seen less revenue generated than the May and June of 2017. That is not good at all.

If Trump doesn't want a balanced budget, then the Joint Chiefs and the major players in Congress do. The current fiscal mess really needs to be addressed. The article below says that we need to average a 2.8% growth rate for the next 10-years to get to a balanced Budget by 2028. That doesn't sound crazy, but if we act like grownups, the individual tax rates expire in 5? years. Then we could raise taxes on just the top 1%-5% of incomes and have tax incentives like taxing short sellers and stock traded too quickly, as well as raising the retirement ages from 62/66 to 63/67. Also, we could improve Medicare by hammering cheats very severely. Bottom-line, we need to average 2.8% for the next 10-years and tweak entitlements. Also, avoid unnecessary wars...

It Would Take Nearly Unprecedented Economic Growth to Balance the Budget

The JCS have no say on the budget and they have never turned down money. None of the major players in Congress are fiscally responsible, I have no idea where you get the idea that they are.

 

[kyzr]

I readily that a trade surplus is NOT the ONLY factor that determines a strong economy, and a trade deficit a weak economy. There are many other factors involved, such as currency, comparative advantage, labor rates, skilled labor, natural resources, various regulations, political stability, roads, factories, capital investment, taxes, population, population income, etc....

That is a good start.

I see your point, the US economy is humming along at ~3%, thanks to the tax cut and reduction in regulations, so things look okay on the surface.

The US economy is humming at the same rate it has been for the last 6 years, nothing changed in the last two.

But, with wages stagnating for decades, and thousands of factories moving overseas how long until we turn into Mexico, where there are billionaires and peons?

Wages are stagnant that is for sure. 80% of the factories jobs lost in the last 20 years are due to automation, not moving overseas. We will never turn into Mexico unless you statist have your way and get the government even more involved in our lives. Factory jobs are no longer the cash cow for people that they once were, times change people need to adapt.

So how can the US address the Debt? Grow the economy, and reduce entitlements and military spending. How best to grow the economy? Create better paying jobs, and develop new products.

We do not have an income problem in this country, we have a spending problem No growing will outpace our spending. And nobody, not even Trump is calling for reduced spending in both entitlements and military

Then the US is screwed. Trump's game plan seemed to be to grow the economy and get back to a balanced budget. The following article looks pretty grim. No wonder Ryan bailed...
Analysis of CBO’s April 2018 Budget and Economic Outlook

Where did you get the idea that Trump wanted a balanced budget? He has not called for spending cuts, just spending more money in different areas. The tax cuts have also exacerbated the problem by slowing revenue growth. After a record braking April that was driven by people like me sending the Feds a check to cover the part of our tax burden that payroll deductions did not cover from the previous year, May and June have seen less revenue generated than the May and June of 2017. That is not good at all.

If Trump doesn't want a balanced budget, then the Joint Chiefs and the major players in Congress do. The current fiscal mess really needs to be addressed. The article below says that we need to average a 2.8% growth rate for the next 10-years to get to a balanced Budget by 2028. That doesn't sound crazy, but if we act like grownups, the individual tax rates expire in 5? years. Then we could raise taxes on just the top 1%-5% of incomes and have tax incentives like taxing short sellers and stock traded too quickly, as well as raising the retirement ages from 62/66 to 63/67. Also, we could improve Medicare by hammering cheats very severely. Bottom-line, we need to average 2.8% for the next 10-years and tweak entitlements. Also, avoid unnecessary wars...

It Would Take Nearly Unprecedented Economic Growth to Balance the Budget

The JCS have no say on the budget and they have never turned down money. None of the major players in Congress are fiscally responsible, I have no idea where you get the idea that they are.

Agreed, but the JCS said that the national Debt is the biggest threat to the US. The bankruptcy of Medicare and Social Security are listed at 2026 and 2034 respectively.
Medicare to become insolvent in 2026, Social Security in 2034: Trustees

There really isn't much time to start fixing the fiscal mess. Growing the economy at 2.8% is a good start, but much more needs to be done before its too late.

 

[edthecynic]

But if one country has a surplus then another has to have a deficit, and if trade deficits are bad then trade would be bad. But trade IS good, so trade is dependent on something other than surpluses and deficits.
That something is the Law of Comparative Advantage.

Funny you never hear about the Law of Comparative Advantage from either side when discussing trade!!!!!
I'll bet few here even know what it is, and you can be sure Tramp never heard of it!

Comparative Advantage is being able to produce goods by using fewer resources, at a lower opportunity cost, that gives countries a comparative advantage. The gradient of a PPF reflects the opportunity cost of production. Increasing the production of one good means that less of another can be produced. Currency manipulation might be another way to increase exports, like China does. But if trade deficits don't matter, why would China devalue its currency?

Comparative advantage means so much more than just producing goods using fewer resources, it means no country is ever at a trading disadvantage as long as different goods are produced at different efficiencies. It says that country A should produce what it produces most efficiently and trade for the rest with country B even if country A can out produce country B on everything. And country B should produce what country A produces less efficiently and trade with country A for the rest. Both countries get more of each other's products by trading than if they produced them themselves.

That is the absolute beauty of the Law of Comparative advantage, both trading countries make out better by trading under ALL circumstances!!!!!

Please factor in what happens when certain countries impose 100% tariffs on Harley motorcycles for example, and Harleys' country imposes no tariffs on anything. Trump is trying to get to a free and fair trade policy.

The country that imposes a 100% tariff SCREWS their OWN comparative advantage and thus stupidly screw themselves in the long run. We should not be stupid along with them and impose tariffs because in spite of their tariffs reducing our comparative advantage by trading with them, we still have a comparative advantage as long as we continue to produce what we produce most efficiently and trade for the rest. By imposing tariffs the other country loses their comparative advantage completely.

Tramp has no idea what he is doing, or he would be supporting free trade and letting the stupid countries screw themselves with their tariffs.

We'll simply agree to disagree. A friend of mine sells Harley MCs. He had a sale to Germany all set, then the guy cancelled because the price would be double due to German tariffs. The guys that got screwed are the Harley folks, not the German guy. Trump wants free and fair trade, i.e. no tariffs. If they want to do tariffs, then lets do tariffs, and we'll see who says "uncle" first.

If tramp wanted free and fair trade he would not have imposed tariffs. As simple as that.

As countries become more dependent on computers for trade decisions, they will follow the Law of Comparative Advantage in those decisions, so I am cautiously optimistic on trade.