You post a quote from a textbook that says trade deficits are not inherently good or bad. Then you claim most economists don't think trade deficits are bad for the economy.

That seems silly. But whatever.

It's not that high. It's gone up 2% in 50 years. You might want to quote a more credible source than.....yourself. a 3% trade deficit has been the norm for the UK and many rich nations. It's just not a sign of inherent sickness, especially when many of the overseas products we buy are made by American companies like iphones etc. That we don't have a ton of workers willing to take crappy manufacturing jobs at very low wages isn't a bad thing.

Can we excise this discussion of tariffs and whether trade deficits are bad?

There is no particular reason why "workers willing to take crappy manufacturing jobs at very low wages" is somehow a component in reducing trade deficits. Neither Germany and South Korea depends on such a thing, and are both nations with a long history of trade surplus. This shouldn't be mistaken as an argument that a trade surplus is somehow an inherently good thing. This is not a debate of "deficit bad, surplus good", and should never be mistaken for that.

The UK does not have a norm for trade deficit of 3%, beyond a balloon year in 2019. The norm has been between 1-2% the last decade, but I'll admit it has been increasing as a trend.

And no, a trade deficit is not "a sign of inherent sickness", but a long-lasting and high deficit which increases over time certainly can be. This is in a similar sense that buying for more than than you earn is not necessarily a bad thing (it could even be a good thing), but it's not a good sign if it happens for years on end. It's certainly true that you should need to look at the issue more closely to look for a final answer, however.

If a trade deficit goes from 1% of GDP to 2% of GDP, it's also a bit hopeful to state that it has "gone up 1%", if the GDP and currency is comparable (which doesn't necessarily follow, but we'll assume it here), we are after all looking at doubling of the deficit. Describing changes in deficit when it is seen as a ratio of another number with its own complexities, a number which again depends on a currency with its own complexities, is actually a tough task. I'm not an economist so I don't have the answer on how best to do that, but I think the method should be a variation of "very carefully".

I have no idea who is right here (or really understand the conversation, to be honest), but I am definitely stealing "You might want to quote a more credible source than.....yourself" and putting it behind my ear for later.

That's funny.

My grandfather owned a house and cars and raised a family of five by working one of those jobs. And never complained.

But yeah. Who needs those jobs ? #lolDems

No one is ever right in an economics argument.
Economists can't agree on most things.

But it's pretty clear that the trade deficit with China costs US jobs.

Also China gets more wealth while the US loses it.

But some of these neo libs can spin bull **** as good as Trump.

Economists agree on most things. Supply and demand. Elasticity. Budget constraints. So on and so forth. You really know nothing about the subject except some derp that comes from Twitter or other sources of leftist conformist derp. You couldn't be more transparent about parroting others.

China's wealth has been used to create buildings that nobody currently uses in ghost cities. Also, you may want to look at China more closely as you seem clueless about China. It has debt like anybody else. But, I know, I know the big sp00ky trade deficit is surely going to bring down the economy one of these days. You remind of libertarians and their endless gold buggery because Zimbabwe inflation is coming too.

Those textbook quotes you don't understand. Sit down and read a textbook. You're stumbling around blindly on a subject that really isn't that hard to understand on a basic level.

Yes , it can be. If you're a war torn country that can't grow crops anymore or lack an educated workforce to mass produce goods it's a big problem. Especially for a large country with sizable population. But the US has the most advanced and diverse manufacturing base in the western world.

Pauly my dear, there are three things you should take away from this thread.

1. Hillary still lost.
2. Bernie is not running.
3. China's economy is not going to crash and burn any time soon.

Your welcome.

I do share some of your sentiment of the Dems losing and the situation at hand but you got to at least start gaining an elementary understanding of basic introductory economics and reduce some of the empty emotional remarks.

I mean, OrP is one of the nicest guys and went pretty far out of his way to genuinely help you and you're at "but Hillary and Bernie."

Edit: That was Paulie and he's also incredibly intelligent and is basically an OrP on cocaine. If he'd offer me advice, I'd listen.

There is a common misunderstanding about the nature of trade deficits, where some people think that trade deficits are inherently bad, like having lower GDP. For example, this seems to be Trump's view. This view was also a result of the view of trade (mercantilism) that was popular in Europe before the rise of modern economics. If you don't have this misunderstanding, great. But there is a difference between a general rule that a trade deficit is bad and the specific claim that the trade deficit right now in the US is bad, just as there is a difference between the general rule that debt is bad and the claim you shouldn't borrow right now. Any argument for the latter will look very different from the former.

If you don't think the basic textbook answer is enough to demonstrate the typical view of economists on trade balances, here is a survey of top economists, where only 5% agree that a typical country can increase its citizens' welfare by enacting policies that would increase its trade surplus (or decrease its trade deficit). Click through and you'll many of these economists saying the exact same thing I'm saying as well.

While it is true that economists disagree about some things, there is also much that they agree about, and it is anti-intellectual to ignore them when they have consensus. For instance, economists are generally agreed that free trade policies are net positive for society. From the same survey cited above:

85% of economists agreed, with only 5% not agreeing.

Xavier Jaravel and Erick Sager (pdf):
You are incorrect here, economists are generally agreed that allowing China into the WTO made the US richer, the question is whether doing so was worth the loss of some jobs that went along with it (85% agree, 0% disagreed from the earlier expert survey).

Well Paul Krugman has been has been walking back the same BS these two are spouting.

I don't get the feeling either is being particularly helpful. But whatever.

If they want to keep living in the 90's that's okay. I think the rest of us will be moving on sooner rather than later.

To be fair I do learn from OP. And I probably do take out my frustration on him too strongly. I'm just done with neo liberal nonsense right now.

Pauly hasn't offered me any advice. So far he just comes by and cries and goes home. Which is fine by me.

I get he's still in mourning.

LOL

I'm going to read through your links and give them some attention but right off the bat only 42% disagree or strongly disagree with that statement.

So much for all economists agreeing all the time.

Yeah, you can tell this is BS because nobody ever advocates austerity as a means to reduce trade imbalances. The US could certainly do it if the masses consumed less and many individuals started making their own clothes, furniture etc. But everybody would rightly laugh at that as a means to improve the US economy.

Why would I offer you advice? I haven't cried about anything. I'm laughing at how ridiculous your ideas are about economics. You're pathetic to me. You have demonstrated you do not know economics while offering batshit crazy takes on it that you got from somewhere online. You blather on about neolibs, though I'm sure you really mean capitalist and cannot identify neolibs from other capitalists. Orwell warned about making language meaningless like you and your cohorts do. You are the ultimate conformist. Like, my dude, there's nothing special about you to take note of.

And I am in mourning you Bernie or Busters are the ones who drag the stupid **** on and on.

You're crying now. lol

I know. My ideas are so off the wall that Trump was able to get voters who felt the pain I talk about.

If only we could all be smart like you and Hillary. Right ?

One of us is pathetic.

Also, who said I was special ? Stop projecting your awkward egomania onto me.
It feels dirty.

Why USA would care about trade deficit when you have a strong and the reserve currency?
Isn’t the point of profiting of your strong currency to buy Goods cheaper outside the country ?
Currency is just a tool of exchanges for utility purpose , it isn’t wealth anyway .
It is wealth when the currency is very strong but all paper currencies comes to an end eventually , regardless w.e you do .
Better spend that currency for useful stuff and create wealth from the stuff bought ?

That's what Clinton and Obama and Hillary said.

It didn't quite turn out that way though. And it's one (of many) reasons we're enjoying a Trump presidency and a stacked SCOTUS.

Some people understand that.
Some people refuse to learn from their mistakes and blame the victims for reacting in a rational manner.
We call the latter type capa d'ossa.

I'm not quite willing to concede that economists tend to agree with each other. Although most do seem to agree that the global economy is 'good' for the US. Good meaning it lowered the cost of consumer goods and kept inflation down. Of course that's the no risk position. It's been what the cool kids say for decades now. Unless they're working on data that specifically relates to displaced workers they likely don't give it much thought.


They're well paid. If they're working for the elite they're going to tell them what they want to hear. If they want that cool 50+ to keep flowing.

Anyway.

One of the sources from your paper :

Abstract
We analyze the effect of rising Chinese import competition between 1990 and 2007 on US local labor markets, exploiting cross- market variation in import exposure stemming from initial differences in industry specialization and instrumenting for US imports using changes in Chinese imports by other high-income countries. Rising imports cause higher unemployment, lower labor force participation, and reduced wages in local labor markets that house import-competing manufacturing industries. In our main specification, import competition explains one-quarter of the contemporaneous aggregate decline in US manufacturing employment. Transfer benefits payments for unemployment, disability, retirement, and healthcare also rise sharply in more trade-exposed labor markets.

This may not be a thing to elites and fake liberals who like to post on internet sights but politically it very much is. And while saying each displaced job creates a consumer surplus of 400k you have to deduct the social cost of this displacement.

But what do I know? I'm pathetic.




I did enjoy looking at your source doc btw. Thanks.

And the main reason not to care, given nobody advocates austerity, is the US has a much larger manufacturing sector than peer nations and we've been at full employment in the very recent past. Why do we need to shift labor to manufacturing when all economic data show efficiency gains from specialization and trade that will dwarf any hypothetical and unknown benefits of somehow massively increasing US manufacturing, whether that is even possible to begin with.

My point was that trade deficit isn’t a function of bad economy Or good economy imo .
The work force is A far more important indication imo .
Interest rate as well .

Of course if you just spend outside the country to buy cheap stuff ( non assets products) and you reduce your workforce by exporting it as well (exporting inflation) you will get problems eventually .

And of course the wealth gap hurts a lot the economy too.

I just think the economy is a balancing act .
It just tilt me when I hear far right thinker Saying only 1 thing or solution to the economy exist , disregarding the fact that economies do evolves and need different framework .

Well, that ends up being the down side. Workers suffer.
So you sort of answered your own question.

I agree about the wealth gap too but one of the regular neo libs will explain to you how that makes the economy better too, I'm sure. They'll even have charts and statistics.

Remember, here in 'merica we serve the economy and our corporate masters.
And we're proud of it. Not like you Canadians with your health care and human rights and all that sissy stuff.

Not necessarily.
It depends on what your economy are based off imo.
Economy based on natural resources will have a much stronger economy with exportation until too high of an imbalanced is created due the currency .

It’s a lot more complicated than if a country have a trade deficit or not .

Take Canada for example .
Canada have a good economy but sometime when oil price gets too strong , the currency becomes too strong and it hurts the manufacturing sectors ( creation of goods collapse because it cost too high to export due to high Canadian currency ) while the oil sector becomes very rich at the expenses of other sectors .

Some economy thrive with trade deficit and some don’t .
It’s depends on what your economy is based on and the strength of your currency imo .

Balancing a range in poker and balancing an economy through sectors are from my POV very similar .