Trade deficits are always detrimental to their nations’ GDPs.

[Supposn]

Trade surpluses’ contributions or trade deficits’ detriments to their Nation’s GDPs are always understated.

Non-exported products that enabled production of export products but weren’t reflected within prices of any exported products cannot be identified.
For example prices of goods often do not FULLY reflect the portions of infrastructure, research and development expenditures that supported the production of those goods. Such support provided by government agencies or other non-profit entities in particular are generally not fully reflected within the prices of the goods.

The extent that production of exported products also enabled or induced additional production of products not exported cannot be identified.
For example increased production of exported products may increase production of local beauty parlor service products.

Unidentified production due to, but not reflected within export prices understate trade surpluses' contributions to their nations’ GDPs.

USA’s trade deficit denied our nation the production of the products we imported. That’s why trade deficits are negative terms within GDP calculations. To the extent that production of goods and service products were not reflected within the prices of USA’s imports, we additionally denied ourselves the infrastructures, reseach, development and experience that supported and/or were derived from the production of USA’s imports.

The direct and indirect benefits due to the production of USA imports and all of the jobs associated to these productions fully contributed to the nations that produced USA’s imported products. USA’s trade deficits understate out trade deficits detriments to our GDP.

Refer to: www.USA-Trade-Deficit.Blogspot.com
Or http://en.wikipedia.org/wiki/Import_Certificates
or http://en.wikipedia.org/wiki/Gross_domestic_product
or Google: wikipedia, import certificates
or Google: wikipedia, gdp

Respectfully, Supposn

 

[GenSeneca]

Trade deficits are a talking point, like taxes, they do not have a causal relationship to GDP. Besides that, trade deficits are a necessary fact of life and are not, by themselves, detrimental.

 

[Supposn]

Trade deficits are a talking point, like taxes, they do not have a causal relationship to GDP. Besides that, trade deficits are a necessary fact of life and are not, by themselves, detrimental.

GenSeneca, you’re correct, it ain't casual.

USA’s trade deficit of goods (excluding petroleum products has been approaching a half trillion dollars annually. Its affect upon our GDP far exceeds the amount of the deficit itself and the GDP bolsters the median wage.

The GDP is not simply a “talking point”. It is comparative statistical “snap shot” of the nation’s annual production. The GDP per capita indicates how much goods and services the nation produced and the median wage indicates to what extent that production has been distributed throughout the nation’s population.

Trade deficits are ALWAYS immediately detrimental to their nation’s economy and they need not be “a fact of life”.

Refer to the discussion of “Reduce the trade deficit; increase GDP & median wage”.
Respectfully, Supposn

 

[GenSeneca]

GenSeneca, you’re correct

I know.

The GDP is not simply a “talking point”.

I didn't say it was... I said the trade deficit is a talking point. After reading more of what you've posted, it appears your biggest complaint is the lack of parity in the distribution of wealth - I am referring to your comments about GDP and Median Wage. So I will ask you point blank: Are you an advocate for government controlled redistribution of wealth?

Trade deficits are ALWAYS immediately detrimental to their nation’s economy and they need not be “a fact of life”.

No... They aren't detrimental. Forget the entire nation for a moment, the concept of 300+ million Americans competing with billions of people around the world is not something the average person can relate to, much less fully comprehend. There's nothing complicated about the concept of a trade deficit and once people understand it, they will realize that it's just another talking point designed to persuade them into going along with a political agenda.

Supposn, I presume that you shop for groceries, I know I do. I spend more money buying products at the grocer than the grocer spends buying products from me - That means I have a "trade deficit" with my grocer and yes, buying groceries is fact of life for most people. But my "trade deficit" doesn't end there... Taco Bell, Bass Pro Shops, NewEgg, AimSurplus, those are just some of the other businesses that I have a "trade deficit" with.

So please, explain how my own personal "trade deficit" with these businesses is detrimental to me.

 

[Supposn]

I know.

I didn't say it was... I said the trade deficit is a talking point. After reading more of what you've posted, it appears your biggest complaint is the lack of parity in the distribution of wealth - I am referring to your comments about GDP and Median Wage. So I will ask you point blank: Are you an advocate for government controlled redistribution of wealth? ................

GenSeneca, trade deficits are ALWAYS detrimental to the nation’s GDP.
I advocate significantly decreasing the nation’s trade deficit of goods.

[There are other achievements that would better improve our economy; significant reduction of our federal and all lesser governments’ budget deficits would be an economic improvement secondary only to significant of our schools which would grant us the greatest economic and social benefits. Similar to many of us, I have thoughts on these issues but nothing that I believe would solutions.
Similar to many of us I believe the implementation of MY proposed remedies for education or governments’ budget deficits concepts would be improvements; but upon these issues I have more confident in my less significant ideas and lesser confidence in the others.
Over the political spectrum there’s generally been strong disagreements regarding government budget deficits and education and our nation’s now within an era of severe political disharmony].

A trade deficit act would be a leading contender if there’s any possibility of our U.S. Congress passing any act that would actually and significantly improve the nation’s economy. I have complete confidence upon the merits of this among all economic proposals that I’ve encountered.

You asked if I advocate “government controlled redistribution of wealth”; In one word my answer is No; now I ask are you in favor of retaining a trade policy that’s significantly detrimental to our nation’s GDP, denies are nation significant numbers of jobs at a wide range of income levels and is thus detrimental to the median wage?

Refer to: www.USA-Trade-Deficit.Blogspot.com
or http://en.wikipedia.org/wiki/Import_Certificates
or http://en.wikipedia.org/wiki/Gross_domestic_product
or Google: wikipedia, import certificates
or Google: wikipedia, gdp’
and the discussion topic
of “Reduce the trade deficit; increase GDP & median wage”

Respectfully, Supposn

 

[BigRob]

GenSeneca, trade deficits are ALWAYS detrimental to the nation’s GDP.
I advocate significantly decreasing the nation’s trade deficit of goods.

[There are other achievements that would better improve our economy; significant reduction of our federal and all lesser governments’ budget deficits would be an economic improvement secondary only to significant of our schools which would grant us the greatest economic and social benefits. Similar to many of us, I have thoughts on these issues but nothing that I believe would solutions.
Similar to many of us I believe the implementation of MY proposed remedies for education or governments’ budget deficits concepts would be improvements; but upon these issues I have more confident in my less significant ideas and lesser confidence in the others.
Over the political spectrum there’s generally been strong disagreements regarding government budget deficits and education and our nation’s now within an era of severe political disharmony].

A trade deficit act would be a leading contender if there’s any possibility of our U.S. Congress passing any act that would actually and significantly improve the nation’s economy. I have complete confidence upon the merits of this among all economic proposals that I’ve encountered.

You asked if I advocate “government controlled redistribution of wealth”; In one word my answer is No; now I ask are you in favor of retaining a trade policy that’s significantly detrimental to our nation’s GDP, denies are nation significant numbers of jobs at a wide range of income levels and is thus detrimental to the median wage?

Refer to: www.USA-Trade-Deficit.Blogspot.com
or http://en.wikipedia.org/wiki/Import_Certificates
or http://en.wikipedia.org/wiki/Gross_domestic_product
or Google: wikipedia, import certificates
or Google: wikipedia, gdp’
and the discussion topic
of “Reduce the trade deficit; increase GDP & median wage”

Respectfully, Supposn

You ignored the whole crux of his question....if trade deficits are so detrimental, why are we not concerned about state level trade trade deficits, or individual level trade deficits?

Also, you say it "always" hurts the economy, but in reality, what are the options for someone overseas when they get dollars?

1) Use/invest them in a place where dollars are accepted. (The United States being the biggest) That just means that those dollars come back to our economy in the form of investment.

2) Trade the dollars for a different currency. This just presents whoever they traded with the same options.

3) Take the dollars out of circulation. This just makes dollars left in circulation more valuable.

What is it that you think people do with their excess dollars exactly?

 

[GenSeneca]

You ignored the whole crux of his question....

Yes, he did. In order to rationally explain the detrimental effects of a trade deficit, you need to first start by explaining the detrimental effects of a trade deficit on the individual level. If you cannot explain how it's detrimental for an individual to run a trade deficit, then any explanation of the detrimental effects in a nation comprised of 300+ million individuals running a trade deficit is shown to be a dog and pony show.

If he is able to make his case for the detrimental effects on the individual level first, he can then extrapolate the numbers to make the case for the detrimental effects on the local, city, state, and federal levels. Without the individual level, he has nothing.

Supposn could start by doing what I asked and using the example of my personal trade deficit with my grocer. If he believes that trade deficits negatively impact median wages, then surely he can explain how my personal trade deficit at the grocer has a negative impact on either my wages, or the wages of those working for my grocer.

I'm quite sure Supposn isn't alone in the belief that trade deficits are detrimental, I hear this nonsense from both the Left and Right. So if ANYONE cares to explain the detrimental effects of my trade deficit with the grocer, I welcome you to make the case. If you cannot make the case, then perhaps you should take a good hard look at the subject and consider the possibility that I'm right, it's a propaganda technique designed to get you to go along with a political agenda.

 

[GenSeneca]

GenSeneca, trade deficits are ALWAYS detrimental to the nation’s GDP.

If that's true, then trade deficits are ALWAYS detrimental to the individual, on the individual level.

I advocate significantly decreasing the nation’s trade deficit of goods.

Of course you do. Please begin by explaining how my individual trade deficit with the grocer is detrimental to me or the employees at the grocer.

Trying to solve a problem that doesn't exist only creates new problems.

A trade deficit act would be a leading contender if there’s any possibility of our U.S. Congress passing any act that would actually and significantly improve the nation’s economy.

The single greatest act Congress could pass to improve the nations economy would be a separation of economy and state.

You asked if I advocate “government controlled redistribution of wealth”; In one word my answer is No

You say your answer is "No", yet you support public schools. As someone who has no children but owns a home and pays property taxes that, in part, go to fund the local public school, I can only view this as a redistribution of my wealth.

now I ask are you in favor of retaining a trade policy that’s significantly detrimental to our nation’s GDP, denies are nation significant numbers of jobs at a wide range of income levels and is thus detrimental to the median wage?

Of course not... That's why I'm not in favor of government setting trade policy. Stop letting government interfere with the economy and our nations GDP would skyrocket and all the jobs, wages, and additional tax revenue would come with it.

 

[GenSeneca]

Supposn... PLC1... Are either of you going to attempt to explain the detrimental effects of a trade deficit on an individual level?

I know there are others who believe as they do, so take a crack at it, explain how my individual trade deficit with the grocer is detrimental to me or the employees at the grocer.

And now for something completely different...

 

[Supposn]

GenSeneca,
I do not agree with the extent that you consider individuals and families’ finances to be as substantially similar to nations’ economies. But I’m entertaining your request that I address your analogy.

I’m primarily concerned with my aggregate transactions rather than with each individual entity. Similarly I’m a proponent of a trade policy that’s concerned only with USA’s GLOBAL trade deficit (rather than trade deficits with any individual or groups of nations). [Refer to the discussion topic “Reduce the trade deficit; increase GDP & median wage“).

The freeing of time and effort due to my family’s outsourcing of goods and services are of convenience to each of us but we exercise some prudence in these matters. We don’t employ a maid. Our family budget requires each of us to perform many mundane tasks.

I cannot fully justify my expenditures of money and time for “do it myself” projects; I lie to myself (and I would lie to my family if I could get away with it), regarding these much less justifiable consumption of our resources. I get personal satisfaction from solving problems, overcoming adversity and being self-reliant. Due to doing it myself, I also the benefit by accumulating tools, experience, and learning.

I try by example to pass the concept of learning by doing onto my children and hopefully they’ll pass it onto their children. To a substantial extent a trade deficit denies the nation of similar benefits. (Refer to the first message of this discussion).

Due to our trade deficit we are losing our “technical edge” in many fields. We produce lesser portions of what we use and consume. Because we decline to produce we’ve already begun being less able to produce. We’re trading better paying production and production supporting jobs for lesser paying jobs. We lose jobs and sometimes we lose entire industries.

A few years ago I was reading of the USA’s annual import and export amounts for classes’ of agricultural products. (I don’t recall if I was also considering meat and livestock). I then calculated that excluding price supported commodities, USA was near or reached a trade deficit of agricultural goods. (USA taxpayers’ subsidize our exports of our price supported commodities).

Individual entities chose to participate in global trade because they perceived opportunity to profit and their anticipations are generally correct. Within USA’s federal and state laws there are some examples of contracts being prohibited or regulated due to the recognition that in many or most cases the specific activity is contrary to the best interests of our society. We have building codes and zoning codes. Your neighbor can not raise and sell hogs next to your home. This concept is the justification of the trade proposal that would prevent U.S global trade deficit of goods’ assessed values.

Our trade deficits would have been less unjustified if it could have enabled our students to be more diligent and/or somehow induced the behavior of our population to be of greater advantaged to our nation. Our trade deficits do not do so.

Imbedded within all GDP calculating formulas conventionally accepted and/or used by the world’s communities of economists and statisticians, trade deficits decrease and surpluses contribute to their nation’s GDPs; that’s thus by definition rather than opinion of the GDP.

To any extent that production is not reflected within the prices of imports or exports, nation’s trade deficits and surpluses affects upon the GDP cannot be fully identified and thus cannot be fully attributed to the nation’s global trade. That’s mathematically logical. That’s why the extent beyond amounts of the nation’s trade imbalances themselves can only be estimated and is thus a matter of opinion. What is certain is the additional unidentified amounts affects upon GDP for trade deficits are ALWAYS addionally detrimental and for trade surpluses ALWAYS additionally contribute to the nations’ GDPs.

I’m not a novelists and can't fully conceive analogies for all the relationships between GDP and personal lives. That's not reason to doubt GDPs affects median wages and thus affect nations’ populations.

I may not be able to provide what you consider as reasonsble analogies between your trip to the grocer and our legal system or the internet or traffic control but due to my inabilitys these and many more govenment concerns are no less beneficial to our nation.

Respectfully, Supposn

 

[Supposn]

If that's true, (i.e. if trade deficits are ALWAYS detrimental to the GDP) then trade deficits are ALWAYS detrimental to the individual, on the individual level. ................

GernSeneca, a trade deficit is ALWAYS detrimental to the GDP.

Unless the trade deficit is due to an extremely narrow segment of industries that had or could have little economic significance, the decreased GDP is detrimental to the nation’s aggregate wage earning families.

Are you contending I’m overstating my case because trade deficit’s detriment to the GDP is not likely detrimental to every individual wage earning family?

Respectfully, Supposn

 

[Supposn]

GenSeneca, USA is not within an era of political harmony but among all detriments to our GDP, the trade deficit is an issue upon which the U.S. Congress might possibly come to some agreement and pass an actual effective remedy. But there’s only hope rather than good reason for optimism.

For too many years our government has been able to agree upon very little that might be beneficial to our nation. We’ll never know if Democrats could be induced to support the president. Obama doesn’t wait to be opposed; he acquiesces and surrenders when anyone clears their throat.

We have two major parties; one leads in the wrong direction and the other stand for nothing, will accept anything, has no direction and cannot lead.

Respectfully, Supposn

 

[GenSeneca]

GenSeneca,
I do not agree with the extent that you consider individuals and families’ finances to be as substantially similar to nations’ economies. But I’m entertaining your request that I address your analogy.

It's not an analogy. The entire economy of the United States (or any country) is based on the 300+ million individual Americans who make billions of economic decisions every hour of every day and therefore drive the national economy. That's right, they drive the national economy, it doesn't drive them.

I’m primarily concerned with my aggregate transactions rather than with each individual entity.

Where do trade deficits come from? The answer is, trade deficits are created by individuals making economic decisions within the marketplace. The national economy is the sum total of its parts and every single individual part racks up his own portion of the trade deficit through economic decisions.

Failing to understand individual trade deficits as being the source of national trade deficits reveals the fatal flaw in your premise regarding trade deficits. Without the ability to qualify statements about the detrimental effects of a trade deficit on the individual level, any statements about the negative impact of trade deficits on the national level remain unqualified.

Similarly I’m a proponent of a trade policy that’s concerned only with USA’s GLOBAL trade deficit (rather than trade deficits with any individual or groups of nations).

There is only one way to actually control trade deficits, by manipulating the economic behavior of every individual participating in the marketplace. So that is what you must be a proponent of, using governments monopoly on the legal use of force to manipulate the population into making the economic decisions you think are right.

A Free Market gives individuals the freedom to make their own choices without force or fraud manipulating the market. Mixed Markets restrict that freedom, Command Markets eliminate that freedom, but both do so by using the force of government to influence, or dictate, individual economic behavior in a vein attempt to "steer" the national economy.

[Refer to the discussion topic “Reduce the trade deficit; increase GDP & median wage“).

The trade deficit shrinks in every economic recession, meanwhile both GDP and unemployment increase. During booms, unemployment decreases while both GDP and the Trade deficit increase. Clearly reducing the trade deficit does not have the causal effect of increasing GDP, much less the median wage... Of course, there are usually millions of low paying jobs that get cut during a recession, so statistically speaking, by reducing the number of jobs at the lower end of the spectrum, median wages would increase - on paper anyway.

I try by example to pass the concept of learning by doing onto my children and hopefully they’ll pass it onto their children. To a substantial extent a trade deficit denies the nation of similar benefits.

If you, as an individual, can teach by example despite our trade deficit, then there is no logical reason the same trade deficit could deny the 300+ million other individuals, of whom our our nation comprised, the same benefit.

USA taxpayers’ subsidize our exports of our price supported commodities.

There should be no government subsidies, bailouts, tax credits, or any other kind of government manipulation of the markets.

Within USA’s federal and state laws there are some examples of contracts being prohibited or regulated due to the recognition that in many or most cases the specific activity is contrary to the best interests of our society.

You believe that using the force of government to restrict, or eliminate, economic freedom from individual market participants is in the "best interests of our society".

We have building codes and zoning codes. Your neighbor can not raise and sell hogs next to your home. This concept is the justification of the trade proposal that would prevent U.S global trade deficit of goods’ assessed values.

All I'm hearing is that you wish to exert control over the economic behavior of individuals for the nebulous concept of the greater good.

Our trade deficits would have been less unjustified if it could have enabled our students to be more diligent and/or somehow induced the behavior of our population to be of greater advantaged to our nation. Our trade deficits do not do so.

Induce: Succeed in persuading or influencing someone to do something.

Well, there's always the force of government to make sure people don't make economic decisions you disagree with, right?

Imbedded within all GDP calculating formulas conventionally accepted and/or used by the world’s communities of economists and statisticians, trade deficits decrease and surpluses contribute to their nation’s GDPs; that’s thus by definition rather than opinion of the GDP.

C + I + E + G = Y

C = Consumer Spending

I = Investment made by industry

E = Excess of Exports over Imports

G = Government Spending

Y = GDP

First off, government spending should NOT be included in the calculation of GDP. Government does not PRODUCE anything, government only CONSUMES wealth that it either taxes out of the economy (lowering GDP), borrows against future taxpayers (lowering future GDP's), or prints out of thin air (Devaluing the currency).

Second, by purchasing cheaper imports over the much more expensive domestic products, a consumer has money left over for savings and investments, the same is true for companies. In a situation where consumers and companies are forced to purchase more expensive goods, their savings and investments will suffer, and, in some cases, the larger expenses can become economically unbearable forcing individuals, and companies, into bankruptcy.

What is certain is the additional unidentified amounts affects upon GDP for trade deficits are ALWAYS addionally detrimental and for trade surpluses ALWAYS additionally contribute to the nations’ GDPs.

You should be careful when using the word ALWAYS...

Hyperinflation causes a nations GDP to skyrocket and drastically lowers the value of the nations currency. As a result, the nations exports dramatically increase and their imports dramatically decrease, leading to a trade surplus. This is what happened in Germany and more recently in Zimbabwe, proving your claim of ALWAYS to be hyperinflated rhetoric.

That's not reason to doubt GDPs affects median wages and thus affect nations’ populations.

You have it all backwards... It is the individual consumer making economic decisions that creates and determines the national economy.

 

[Supposn]

......... The single greatest act Congress could pass to improve the nations economy would be a separation of economy and state.

GenSeneca, are you proposing the USA emulate Haiti? Minimal government oversight and regulation, buyers beware? That was the cause of our savings and loans fiasco, our credit crunch, and our gulf oil spill were all due to industries self regulation.

If you’re serious about “separation of economy and state”, start a discussion upon a specific example and or a specific remedy. I’ll post to your topic.

Respectfully, Supposn

 

[GenSeneca]

GenSeneca, are you proposing the USA emulate Haiti?

We have a separation of Church and State, does that mean we are emulating the USSR?

Minimal government oversight and regulation, buyers beware?

Minimal, as in minimal, not corrupt or non existent as was/is the case with Haiti. Governments only legitimate function is the protection of Individual Rights, so any laws that effect the economy should be limited to the specific job of protecting the public from force and fraud.

That was the cause of our savings and loans fiasco, our credit crunch, and our gulf oil spill were all due to industries self regulation.

Fed Policy, Fed Policy, and a failure of government to perform its legitimate task of protecting the public from force and fraud. Perhaps if the government were focused on protecting the public from force and fraud, rather than dabbling in a million other non related activities, occurrences such as the gulf spill could have been avoided.

If you’re serious about “separation of economy and state”, start a discussion upon a specific example and or a specific remedy. I’ll post to your topic.

This one should do:

https://www.houseofpolitics.com/forum/showthread.php?t=10484

I ask everyone, as you're learning now, to defend their positions so I thought it was appropriate to create a thread where people could demand that I defend my position in support of Capitalism.