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Thread: Trade deficits are always detrimental to their nations’ GDPs.

  1. #1
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    Trade deficits are always detrimental to their nations’ GDPs.

    Trade deficits are always detrimental to their nations’ GDPs.


    National trade surpluses’ contributions or trade deficits’ detriments to their nations’ GDPs are always understated.

    They’re understated to the extent that any goods or service products which support or were induced by the production of globally traded products but are not reflected within the prices of such products are not attributed to global trade. But all production does contribute to the producing nations’ GDPs.

    USA’s trade deficit denied our nation the production of the products we imported. To the extent that production of goods and service products were not reflected within the prices of USA’s imports, we were additionally denied the infrastructures, the knowledge and experience gained due to the production of USA’s imports, any research, development or other goods and service products that supported or were induced by the production of USA’s imports.

    These productions and all of the jobs associated to these productions fully contributed to the nations that produced USA’s imported products.

    Refer to: www.USA-Trade-Deficit.Blogspot.com and
    and http://en.wikipedia.org/wiki/Import_Certificates
    Respectfully, Supposn

  2. #2
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    Aggregating everything into a GDP and then fixating on it will only lead you into stupidity.

    People save for the future? GDP goes down.

    People buy XXXX they don't need on credit and throw it out? GDP goes up.

    So what you say may be true, but it is also pointless. I don't care if my "GDP" goes down if my standard of living doubles.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  3. #3
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    I agree 100%. Percent of GDP is a good comparison sometimes but people need to know the limitations of such a number. In theory a country could have $0 in debt in 2010, have a GDP of $10 billion and then borrow $2 billion to pay for the government in 2011, have no taxes, and only have debt to GDP of 20%. This is misleading because clearly those actions will be bad in a short period of time. Furthermore, like mentioned, it doesn't show the strength of what makes up that GDP, what the debt is, what the trade deficit is, etc.

  4. #4
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    GDP & median wage

    Symbiote,A nation’s annual gross domestic product, (GDP), is a statistical description of total annual production of goods and services within the borders of the nation.

    It’s used to compare the nation’s production of wealth within different years. The global community of economists and statisticians have not yet devised and agreed upon any superior method to accomplish such comparisons.
    GDP values goods and service products objectively by their monetary cost.

    It makes no subjective judgment as to their comparative benefit to the nation’s society.

    Heart surgery and lap dances, cosmetics and dialysis machines are all gauged by the expenditures to produce or obtain the products. You regret the expenditures for government? I regret the money spent for TV prescription drug advertisements.

    The median wage divided by the per capita GDP would indicate the extent that nation’s production is distributed among its population.

    I can’t conceive a superior method to describe that. If that statistic were modified to reflect the U.S. dollar’s purchasing power, it would be an excellent method to describe and compare USA’s standards of living between different years.

    Respectfully, Supposn

  5. #5
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    You are like a primitive man using astrology to prophesise. I am telling you that astrology is not a useful tool for this purpose, and your argument is that your astrology is at least as good as all the other variations of astrology you havce come across.

    I am not saying that there is a better aggregate statistic that you should be using, I am saying that all aggregate statistics of this kind are not very useful, and the blind application of them you are employing will only lead you to erroneous conclusions - as exhibited in this thread.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  6. #6
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    Trade deficits, GDP and median wage.

    Symbiote,

    do you also contend that the loss of entire industries and better paying jobs that continue to accompany what’s thus far is more than a half century of increasing trade deficits?

    Are they also a mirage or you deny the logical relationship between these factors?

    Respectfully, Supposn

  7. #7
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    You're missing a verb somewhere, but if I get the rough gist of what you are saying; yes, trade deficits are a scapegoat for or symptom of America's actual economic problems and should not be considered a cause.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  8. #8
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    Symbiote, I’m a poor proofreader and I expect grammar and spell check to catch my errors. This is my rewrite of the message but I will not presume that it’s expressed in proper English form. English spelling and grammar ain’t my forte:

    Symbiote, do you also contend that the loss of entire industries and better paying jobs that continue to accompany increasing trade deficits in excess of a half century are mirages or do you deny the logical relationship between these factors?

    Quote Originally Posted by Symbiote View Post
    You're missing a verb somewhere, but if I get the rough gist of what you are saying; yes, trade deficits are a scapegoat for or symptom of America's actual economic problems and should not be considered a cause.
    I may or may not have missed a verb but you’re missing the point. The trade deficit is not a scapegoat or symptom but is itself among the significant contributors to USA’s economic detriment.

    Respectfully, Supposn

  9. #9
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    Yes industries and the jobs in those industries have been lost. This is not inherently a problem; since in a healthy economy these will be replaced by new jobs and new industries aligned with a country's strengths.

    In the case of the USA, the replacement is not occurring.

    Trade deficits are not the cause of this series of events; I would look towards excessive government debt, and a bankrupt financial system that encourages speculative bubbles at the expense of genuine growth.

    You could shut down international trade entirely or put up stiff tariff walls and end the trade deficit, but this would not solve any of America's problems, it would only make them worse.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  10. #10
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    Trade deficits are the problem.

    Quote Originally Posted by Symbiote View Post
    Yes industries and the jobs in those industries have been lost. This is not inherently a problem; since in a healthy economy these will be replaced by new jobs and new industries aligned with a country's strengths. In the case of the USA, the replacement is not occurring.

    Trade deficits are not the cause of this series of events; I would look towards excessive government debt, and a bankrupt financial system that encourages speculative bubbles at the expense of genuine growth.

    You could shut down international trade entirely or put up stiff tariff walls and end the trade deficit, but this would not solve any of America's problems, it would only make them worse.
    Symbiote, our trade deficit is due primarily to other nations being unable or unwilling to compensate their labor to the extent of USA wage scales.

    We cannot and should not attempt to remedy the problem of foreign nations’ labor compensation.

    I’m not opposed to USA’s global trade; I’m opposed to our global trade deficit. We can limit the deficit and its detriment to our economy while also increasing our GDP more than otherwise. I’m a proponent of a trade proposal that would do so while inducing the sum of our aggregate imports plus exports to increase.

    Refer to the topic “Reduce the trade deficit; increase GDP & median wage” that was last posted to on the fifth of November.

    Respectfully, Supposn

  11. #11
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    Your claims about what causes trade deficits and your plans to eliminate them are irrelevant, since I do not agree they are a problem in the first place.

    Milton Friedman disagreed that trade deficits were in themselves a negative.

    The Austrian School pointed out the absurdity of dealing with them at all - Do you also believe that trade deficts are an evil at a state level? If Florida imports more than it exports, is that something the state of Florida should be dealing with? At a level of individual cities, or families?

    It should be clear that the principles applying to the balance of payment of the United States are the same for one region of the country, for one state, for one city, for one block, one house, or one person. Obviously no person or group can suffer only because of an "unfavorable" balance; he or the group can suffer only because of a low level of income or assets.
    ~Rothbard

    At best, a national statistic like trade balance is a blunt economic tool that helps us understand what is going on in a very rough and general way. Trying to manipulate it is foolhardy, and belies a lack of understanding about actual problems.
    Last edited by Symbiote; 07-16-2011 at 06:43 AM.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  12. #12
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    Trade deficits, GDP and median wage.

    Quote Originally Posted by Symbiote View Post
    Your claims about what causes trade deficits and your plans to eliminate them are irrelevant, since I do not agree they are a problem in the first place.

    Milton Friedman disagreed that trade deficits were in themselves a negative.
    .................At best, a national statistic like trade balance is a blunt economic tool that helps us understand what is going on in a very rough and general way. Trying to manipulate it is foolhardy, and belies a lack of understanding about actual problems.
    Symbiote, economists cite the gross domestic product, (i.e. GDP) as an indicator of the nation’ aggregate production of goods and service products.
    The GDP is generally accepted by within our globes entire communities of economists. I have not suggesting a “manipulation” of the GDP.

    Due to the definition and all generally accepted formulas for calculating the GDP, trade deficits are integral to the GDP. Within all those formulas and calculations, trade surpluses logically contribute to and trade deficits are subtracted from the calculation of GDP.

    Unlike domestic production, production of a nation's imported goods contributes nothing to that nation’s GDP.

    Respectfully, Supposn

  13. #13
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    Trade deficits, GDP and median wage.

    Quote Originally Posted by Symbiote View Post
    Your claims about what causes trade deficits and your plans to eliminate them are irrelevant, since I do not agree they are a problem in the first place.
    Milton Friedman disagreed that trade deficits were in themselves a negative.

    The Austrian School pointed out the absurdity of dealing with them at all - Do you also believe that trade deficts are an evil at a state level? If Florida imports more than it exports, is that something the state of Florida should be dealing with? At a level of individual cities, or families

    ~Rothbard

    At best, a national statistic like trade balance is a blunt economic tool that helps us understand what is going on in a very rough and general way. Trying to manipulate it is foolhardy, and belies a lack of understanding about actual problems.
    Symbiote, Milton Friedman writes of the monetary aspects of a nation’s trade deficit without regard to the losses of industries and jobs. I doubt that he’s written anything that refutes the posted message #12.

    I’m a proponent of a market rather than government driven trade proposal. (Assessments of goods’ values are technical rather than policy determinations.)

    That proposal’s much less negatively affected by the currencies’ exchange rates. As many of our Democrat and Republican presidents have complained, foreign manipulation exacerbates our trade deficits and cost American jobs.

    Regarding trade deficits between U.S. states, most state governments competing for production facilities, job, and tax revenues do very much consider their states gross domestic product. That’s why states are in competitive a bidding wars against each other. It’s not unusual for the states to offer inducements at significant the cost of their taxpayers, to compete in bidding wars to attract corporations.

    Most often after accepting the state’s costly considerations, the corporations do not deliver the promised jobs. The states’ taxpayers rather than the corporations pay for those un-kept promises.


    Respectfully, Supposn

  14. #14
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    Supposn, as we already discussed:

    I don't care if my "GDP" goes down if my standard of living doubles, your fixation on pursuing movements in aggregate statistics is pointless. And on Friedman you are wrong, the transfer of industries to developing nations was precisely what he wrote about.

    I’m a proponent of a market rather than government driven trade proposal.
    You are a proponent of a set of export subsidies and import tariffs designed to precisely equalise the balance of trade, an objective which is both arbitrary (if a positive balance of trade is a good thing, why do you want to stop when exports and imports are only just equal? Why not go for a 2:1 or 100:1 export: import ratio?), punitive to American consumers, and most importantly; trying to solve a problem which does not exist.
    Last edited by Symbiote; 07-16-2011 at 06:18 PM.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  15. #15
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    Trade deficits, GDP and median wage.

    Symbiote, the GDP bolsters the median wage but proportionally the median wage increases less and decreases more than that the GDP, (i.e. wage earners proportionally share less of the gains and more of the economy’s losses).

    I will not speculate upon unknown individuals’ wages but in aggregate if the GDP decrease, wages will proportionally decrease more.
    In such cases the living standards of U.S. wage earners are adversely affected.

    The proposal would prevent U.S. assessed import goods from exceeding our exports of goods. Other than that, all determinations are the markets determinations. This is not a policy of isolation; it induces USA’s sum of imports plus exports to be greater than otherwise.

    Trade deficits are always detrimental to their nations’ GDPs.

    Respectfully, Supposn

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