Trade deficits
- Thread starter Crazyhole
- Start date
Haha. Nope.
But I'll add something. It's really important to understand how something is calculated.
Did you know if a intl. tourist comes to Disney World, everything they spend money on including their hotel room and food counts as a export by the US?
We could have a trade deficit with just a bunch of Americans traveling to a certain place.
The OP is a good question. You'd really have understand trade and how markets work to come up with the correct answer to the OP.
I bring it up because in the last few years the topic has been reduced to the most simplistic form. Currency= wealth, so if our currency is leaving then it must be a bad thing. It doesn't even take into account the 2nd factor of what we are getting in exchange for that currency. It also relies on the idea that the currency we export will have the same value when it returns.
Trump screams "we're losing" when it come to trade, but what exactly are we losing? We are receiving products in exchange for a currency that floats around for months, years, or decades before it returns in exchange for our products and at that point it isn't worth nearly as much. We print a dollar, use it to buy something that is worth a dollar, then (x) time goes by before it comes back and then it's only worth a percentage of what it was.
Is that good or bad?
Trump screams "we're losing" when it come to trade, but what exactly are we losing? We are receiving products in exchange for a currency that floats around for months, years, or decades before it returns in exchange for our products and at that point it isn't worth nearly as much. We print a dollar, use it to buy something that is worth a dollar, then (x) time goes by before it comes back and then it's only worth a percentage of what it was.
Is that good or bad?
Are you trying to explain how trade work or asking how trade works?
If you're asking how it works, I highly recommend this book.
Are you trying to explain how trade work or asking how trade works?
If you're asking how it works, I highly recommend this book.
Not asking necessarily, but also not stating necessarily. Wealth of nations is fine and still somewhat applicable today but in many ways it is obsolete. That's why I started the thread and called it an intellectual exercise, because there are an awful lot of variables that exist today that didn't in the 17 and 1800s. It's kinda fun trying to flowchart things out and bounce ideas around.
While I agree with the fact that its too simplistic, Trump isn't wrong about one thing ...
The US does have the lowest tariffs in the world, and has negotiated too many 'free trade' deals that give far more protectionist benefits to our trading partners. Ross Perot argued this in the '90s as well, and Gore ... well, he lied his @$$ off too ("but Perot was mean!" -- US media). Too many 'trade deals' are special interest for specific US companies at the expense of entire industries.
It's so much so the case that even the anti-Trump WaPo had to bring in other financial aspects, like the tax cuts, to even get just two (2) Pinocchios.
I'm still trying to figure out if you have really strange way of conveying sarcasm or if you have a hard time understanding the links that you post. 99% of the time, your links completely contradict your post.
It doesn't contradict my point. The WaPo is anti-Trump, and in the end, they had to concede several things he said, even if they were trying to distract from Trump's point, and say he was wrong.
I do that purposely. To show that I can take the most critical of posts and show where my objective points are things they have to concede, even if they do everything else to detract from those facts.
I really invite people to look up the realities of our current trade policies, and how much other countries use protectionist tariffs on us that we do not respond with in kind. Canada has some of the worst imbalances with us in their favor.
I'm not even sure what you're trying to say in this post.
I'm going to assume from your previous posts that you agree with me in free markets, 0% Tariffs, and no commerce laws aka Liberty.
Then piss off. Don't respond if you don't care.
The laws of supply and demand are always and will always apply, and even the most complex aspects of macro are held to account by it. When I say obsolete, I mean to the end that how the world has been applying monetary policies for the last 30-40 years makes it nearly impossible to be predictive with the traditional theories on economics. The other issue is that there is no standard that is reasonably static. The value of all products and currencies are becoming more relative to other values that aren't static. It's part of the reason that calls for a world bank are rising, so they can place a standard to measure off of.
It's hard to not believe in it considering the entire world spent 50 years subscribing to it. I think in general it's faulty but let's not act like what we are doing now is anywhere close to what Keynes prescribed. That isn't the point anyway. I'm talking about how to apply the philosophies of Hayek and Mises to the reality of the world we live in.
No doubt that Keynes is the most influential person of the 20th century.
I’m an Austrian too. I have had time seeing Austrian economics becoming favorable. I hope it does.
And Keynes is a main economist who started the fear mongering of trade deficits.
He proposed Bancore. A universal currency and international body who would fine countries for maintaining trade deficits.
Where are the Republicans who should be calling out Trump for his Keynesian ideas?
He proposed Bancore. A universal currency and international body who would fine countries for maintaining trade deficits.
Where are the Republicans who should be calling out Trump for his Keynesian ideas?
I utterly agree.
But we don't have that in our 'free trade' agreements. Ross Perot has repeatedly tried to point that out.
What are NAFTA and :
- Israel: Israel–United States Free Trade Agreement (includes Palestinian Authority; 1985)
North American Free Trade Agreement (NAFTA) (includes Canada and Mexico; 1994)- Jordan: Jordan–United States Free Trade Agreement (2001)
- Australia: Australia–United States Free Trade Agreement (2004)
- Chile: Chile–United States Free Trade Agreement (2004)
- Singapore: Singapore–United States Free Trade Agreement (2004)
- Bahrain: Bahrain–United States Free Trade Agreement (2006)
- Morocco: Morocco-United States Free Trade Agreement (2006)
- Oman: Oman–United States Free Trade Agreement (2006)
- Peru: Peru–United States Trade Promotion Agreement (2007)
Dominican Republic–Central America Free Trade Agreement (DR-CAFTA; includes Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic; 2005)- Panama: Panama–United States Trade Promotion Agreement (2012)
- Colombia: United States–Colombia Free Trade Agreement (2012)
- South Korea: United States–Republic of Korea Free Trade Agreement (2012)
Never mind. Don't answer that. Ross Perot was an idiot when it came to trade.
No economist would agree with that foolishness.
What are NAFTA and :
then?
Apparently you didn't read the NAFTA bill. Perot nailed it about how many special interest terms are in it.
But do please explain to me how protectionist polices in NAFTA, like protecting Canadian agriculture and dairy, is 'free trade'?
I am a 100% free trade advocate. But we do not have free trade in NAFTA and several others.
Free trade from a strictly economic standpoint is an easy argument to make but it doesn't take into account any of the moral or ethical standards that we hold as important to the sanctity of life. There has to be a limit, unless we are interested in foregoing all of the laws of nature that we hold as truth.
I think it will, but it won't be the strict version of Mises. Can you imagine him trying to decipher currency as a floating mechanism without a standard measure at this point and apply it to demand, inflation, or relative values? It would be entertaining to see the meltdown quite honestly.
Well, I wasn't even looking at that (but yes, that's another consideration).
NPR had a good segment many weeks back on what protections are granted the Canadians in NAFTA, and how they've also had their issues with other countries using their nation as an importer fort he US.
Trump has been talking about the TPP again, so we'll see what is in it after any negotiations.
