Page 1 of 3 123 LastLast
Results 1 to 30 of 68

Thread: So I知 Told Trade Deficits Are Good

  1. #1

    Default So I知 Told Trade Deficits Are Good

    A sizeable number of economists, especially libertarian ones, actually defend trade deficits as good things. They base their argument on one made by an influential French economist of the 1800s named Fr馘駻ic Bastiat, who essentially said that if a company or other entity sells its products overseas and then buys lots of other products in that foreign land — products that are sold more inexpensively there than they are sold in the home country — the company or entity is not causing its home country or people hardship. In fact, he says, the home country benefits because its people are merely getting a really good deal in trade. For example, say Apple sells its iPhones in China, banking the money in the United States. Then if Apple workers and stockholders use the money to buy all manner of cheap Chinese products — oranges, fish, lamps, lightbulbs, shoes, etc. — Americans should celebrate their cheap buys.

    In correspondence with this writer, economics professor Walter E. Williams was gracious enough to supply a succinct rationale for the line of thinking behind the defense of trade deficits:

    Briefly: Say that a Japanese producer sells us a Toyota for $20K. If he just kept the money, it would be great for us. We’d have Japanese producers producing wonderful thing[s] for us in return for tiny slips of paper called dollars. If you accept that Japanese producers are not so stupid as to do that, and they don’t buy anything from us, then what? They might use those dollars to purchase something from an India[n] producer. India[n] producers have no use for dollars except to use them to purchase something from maybe a German producer. The German producer might then purchase something from the U.S. The only reason anyone would take a dollar in return for goods is to ultimately have a claim on something produced in the U.S. That’s unless you believe that foreigners just love to keep and look at the pictures of our former presidents on tiny slips of paper.

    So under this theory, all the dollars Americans send abroad in trade eventually return to the United States to buy goods or services from Americans, unless foreigners are foolish enough to keep those little colored pieces of paper instead of redeeming them for American products. Either way, Americans win.

    The trade-deficits-aren’t-bad argument concludes that the economies of both countries involved in unequal trade benefit by the exchanges. In fact, under the theory, the country with the trade deficit probably is actually making out better in trade deals than the country or countries with which it trades: Not only did it get a very good deal in trade, but the country or countries trading with it will boost its economy by buying its products or stocks or bonds.

    As has been said many times, “It sounds good in theory; how does it stand up to reality?”

    Assumptions, Assumptions
    Actually, there’s good reason to see things this way — because trade deficits are not necessarily bad. As Professor Williams also has pointed out, very often what foreign entities do with the money Americans send them for products is buy stocks or bonds in the United States, strengthening segments of America, or they open businesses here, such as Toyota did in Huntsville, Alabama. As well, often trade deficits are accompanied by less unemployment, increased GDP, more manufacturing output, and lower poverty rates, as related by the Cato Institute’s Daniel Griswold in his article “A Rising Trade Deficit Signals Good Times for U.S. Economy.”

    However, observation of the economies of the world shows that the theory doesn’t stand up well under all conditions. It is only true under certain conditions.

    Consider: If it is absolutely true that trade deficits don’t matter, it must hold true, as well, that any size trade deficit doesn’t matter — even to the point that a country can purchase all goods from abroad, without consequence. But there is a very obvious consequence to such a course, namely currency crashes — of which there have been 21 around the world in the past 25 years.

    Of the 21 countries that caused hyperinflation of their currencies, 17 were running trade deficits at the time their currencies imploded. One of the remaining four, Brazil, had deficits leading up to the crash, but not in the year that rapid inflation began because of newly imposed import restrictions; and another, Zimbabwe, didn’t have trade deficits until several years after inflation began in earnest, but its foreign trade did drop dramatically before then, leading to hyperinflation. Of the two remaining countries, Poland and Russia, there were other factors involved that had a similar effect on their economies as trade deficits: Poland had a trade surplus with Russia, but Russia only actually paid for a small fraction of the goods it imported from Poland because Russia was becoming insolvent as well.

    In Russia, before its currency imploded, imports and exports usually balanced because the Western world didn’t accept the ruble in trade — Russia needed to barter or use gold in trade with Westerners — but it still essentially ran deficits because in trade with the communist bloc, Russia often paid higher-than-world-market prices for goods it got from its trade partners in order to boost their failing economies. (For instance, Russia paid Cuba above-market prices for sugar.) Russia also gave direct aid to totalitarian governments so that they would follow Russia’s foreign-policy lead.

    Is it merely coincidence that countries that have hyperinflated their currencies had trade deficits, or is it a pattern signifying a link?

    A currency hyperinflates when producers in a country can’t produce enough goods — create enough wealth — to pay for government services, and the government decides to print money to pay for its employees and services. When people both at home and abroad realize that the currency produced by a country far outstrips the value of the saleable goods available in that country, price inflation runs rampant, and if enough money is printed, the currency can lose value rapidly, becoming virtually worthless. It is a truism that if a country purchased all goods from abroad, a country’s currency would quickly devalue, providing a tie between trade deficits and currency crashes. (In truth, a country could provide services in exchange for goods, meaning a country would have to run a deficit in both goods and services to rapidly ruin its currency.) And hyperinflation often leads to pain for the people in those countries: starvation, rampant crime (post-crash in Russia, when criminals wanted something such as an apartment, the original owners often simply disappeared), lack of healthcare, etc., so trade deficits can definitely have downsides.

    Also, if it is strictly true that trade deficits are good things, it follows, too, that every country with a trade deficit should benefit. And that’s obviously not true. In fact, when Third World countries open their doors to imports, and the peoples in them are supplied with goods from abroad far cheaper than they could get the goods domestically, their local industries can be overwhelmed before they can compete in world markets, shutting them down. Hence, the open doors cause the countries to have few jobs, and the people continue to live in Third World conditions, often holding such livelihoods as growing gardens or herding cows and living in mud and stick huts.

    Ironically, showing how open trade doors in Third World countries doesn’t work is a case of generosity gone awry, as explained in the October 2011 article in Foreign Policy magazine entitled “Haiti Doesn’t Need Your Old T-shirt.” When Americans give their old clothes to a charity such as World Vision, the charity then gives the clothes away in Third World nations, putting the local industries out of business. Then the out-of-work residents can no longer afford to buy food or other necessities. The author explains:

    World Vision, for example, spends 58 cents per shirt on shipping, warehousing, and distributing them, according to data reported by the blog Aid Watch — well within the range of what a secondhand shirt costs in a developing country. Bringing in shirts from outside also hurts the local economy: Garth Frazer of the University of Toronto estimates that increased used-clothing imports accounted for about half of the decline in apparel industry employment in Africa between 1981 and 2000. Want to really help a Zambian? Give him a shirt made in Zambia.

    The article makes clear that people seldom starve or are malnourished in Third World countries because of a lack of available food; they go hungry because they cannot afford to buy the food.

    Almost counter-intuitively, gifts of food also further impoverish the poor. When President Bill Clinton sent subsidized rice to Haiti, his actions wiped out thousands of local rice farmers who could no longer sell their produce (an action Clinton is said to have deemed one of his most grievous mistakes).

    On the other hand, if a country has a trade deficit because it is buying production equipment so that it can soon produce items and run trade surpluses, a trade deficit could actually be a good thing. Take Malaysia as an example: In 1995, it had a worrisome trade deficit equal to nine percent of its gross national product, mainly as a result of importing capital goods for start-up enterprises. Since 1998, it has recorded consistent trade surpluses.

    More at: https://www.thenewamerican.com/econo...icits-are-good


    If you don't make anything you will run out of money to buy what others make and be unable to supply your own needs.
    Last edited by Swordsmyth; 03-12-2018 at 03:42 PM.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



  2. Remove this section of ads by registering.
  3. #2

    Default

    What is the REASON you have a trade deficit? Is it because you are unable to produce anything your trading partners want to buy? Is it because you have more money than they do and can afford to buy more things from them than they can buy from you?
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  4. #3

    Default

    Wall o text.

    As to your comment, that is just plain silly.
    典he nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them. --George Orwell

    Quote Originally Posted by AuH20 View Post
    In terms of a full spectrum candidate, Rand is leaps and bounds above Trump. I'm not disputing that.
    Who else in public life has called for a pre-emptive strike on North Korea?--Donald Trump

  5. #4

    Default

    Quote Originally Posted by kcchiefs6465 View Post
    Wall o text.

    As to your comment, that is just plain silly.
    If you are too simple minded to read an article and understand it's argument then that explains your position on defensive tariffs as well.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  6. #5

    Default

    Quote Originally Posted by Swordsmyth View Post
    If you are too simple minded to read an article and understand it's argument then that explains your position on defensive tariffs as well.
    It has nothing to do with being simple minded.

    Break your copied posts into paragraphs so they are readable. I have to do this all the time.
    There is no spoon.

  7. #6

    Default

    Quote Originally Posted by Zippyjuan View Post
    What is the REASON you have a trade deficit? Is it because you are unable to produce anything your trading partners want to buy? Is it because you have more money than they do and can afford to buy more things from them than they can buy from you?
    We have a trade deficit because other countries have subsidized their industries and blocked ours with tariffs while we have done nothing or in many cases we actually subsidized foreign industries at the expense of our own.

    The longer we allow the status quo the closer we will get to being broke and unable to provide for ourselves.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  8. #7

    Default

    Quote Originally Posted by Swordsmyth View Post
    If you are too simple minded to read an article and understand it's argument then that explains your position on defensive tariffs as well.
    Over the long run, tariffs don't help with your trade deficit. If you tell a country you don't want to buy from them, they say OK, we won't buy certain items from you. You cut your imports but you also get your exports reduced. Total trade is lower- and the deficit still remains. It only works if the other side does not respond.

    A stronger currency hurts too. That makes imports cheaper for you while making your exports more expensive for others to buy.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  9. #8

    Default

    Quote Originally Posted by Swordsmyth View Post
    If you are too simple minded to read an article and understand it's argument then that explains your position on defensive tariffs as well.
    If you are too simple to format an article before you post it, maybe you shouldn't be involved in civil discourse.
    典he nationalist not only does not disapprove of atrocities committed by his own side, but he has a remarkable capacity for not even hearing about them. --George Orwell

    Quote Originally Posted by AuH20 View Post
    In terms of a full spectrum candidate, Rand is leaps and bounds above Trump. I'm not disputing that.
    Who else in public life has called for a pre-emptive strike on North Korea?--Donald Trump

  10. #9

    Default

    Quote Originally Posted by Ender View Post
    It has nothing to do with being simple minded.

    Break your copied posts into paragraphs so they are readable. I have to do this all the time.
    I broke it up to satisfy you but it was readable, paragraph breaks don't change the language.

    If was really a problem the link to the original article is provided, but somehow those in a rush to dismiss the argument they hadn't read didn't bother to use it.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  11. #10

    Default

    Quote Originally Posted by kcchiefs6465 View Post
    If you are too simple to format an article before you post it, maybe you shouldn't be involved in civil discourse.
    If you didn't like the post you could have followed the link to the original article before dismissing it.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  12. #11

    Default

    Quote Originally Posted by Zippyjuan View Post
    Over the long run, tariffs don't help with your trade deficit. If you tell a country you don't want to buy from them, they say OK, we won't buy certain items from you. You cut your imports but you also get your exports reduced. Total trade is lower- and the deficit still remains. It only works if the other side does not respond.

    A stronger currency hurts too. That makes imports cheaper for you while making your exports more expensive for others to buy.
    Tariffs reduce the trade deficit and allow you to produce what you need so that you aren't dependent on others for your needs.
    In any case not all trade deficits are bad and not all tariffs are good but our trade deficit is bad and defensive tariffs are good.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  13. #12

    Default

    Quote Originally Posted by Swordsmyth View Post
    Tariffs reduce the trade deficit and allow you to produce what you need so that you aren't dependent on others for your needs.
    In any case not all trade deficits are bad and not all tariffs are good but our trade deficit is bad and defensive tariffs are good.
    The US Trade Deficit with China is about $375 billion. Our steel imports from them? Less than $2 billion. These tariffs will have zero impact on our trade deficit.

    The steel industry currently employs about 80,000 people. They will benefit from the steel tariff. Millions are working in industries which use that steel. They will face higher costs and may lose some workers while consumers pay higher prices for final goods. A small number of people benefit while a much larger number are made worse off.

    We already know what will happen because this is not the first time we have done this. When Bush similarly imposed a 30% tariff on steel in 2002 to protect US steel workers an estimated 200,000 jobs were lost in steel using industries. And the number working in the steel industry did not increase. It cost jobs- it didn't save them. It did not make the US better off.



    And our trade deficit grew.



    https://tradingeconomics.com/united-...lance-of-trade
    Last edited by Zippyjuan; 03-12-2018 at 03:50 PM.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  14. #13

    Default

    Ron Paul had some good things to say about this a couple years ago.
    https://mises.org/wire/ron-paul-protectionism-wont-help

  15. #14

    Default

    Quote Originally Posted by Swordsmyth View Post
    A sizeable number of economists, especially libertarian ones, actually defend trade deficits as good things. They base their argument on one made by an influential French economist of the 1800s named Fr馘駻ic Bastiat, who essentially said that if a company or other entity sells its products overseas and then buys lots of other products in that foreign land products that are sold more inexpensively there than they are sold in the home country the company or entity is not causing its home country or people hardship. In fact, he says, the home country benefits because its people are merely getting a really good deal in trade. For example, say Apple sells its iPhones in China, banking the money in the United States. Then if Apple workers and stockholders use the money to buy all manner of cheap Chinese products oranges, fish, lamps, lightbulbs, shoes, etc. Americans should celebrate their cheap buys.

    In correspondence with this writer, economics professor Walter E. Williams was gracious enough to supply a succinct rationale for the line of thinking behind the defense of trade deficits:

    Briefly: Say that a Japanese producer sells us a Toyota for $20K. If he just kept the money, it would be great for us. We壇 have Japanese producers producing wonderful thing[s] for us in return for tiny slips of paper called dollars. If you accept that Japanese producers are not so stupid as to do that, and they don稚 buy anything from us, then what? They might use those dollars to purchase something from an India[n] producer. India[n] producers have no use for dollars except to use them to purchase something from maybe a German producer. The German producer might then purchase something from the U.S. The only reason anyone would take a dollar in return for goods is to ultimately have a claim on something produced in the U.S. That痴 unless you believe that foreigners just love to keep and look at the pictures of our former presidents on tiny slips of paper.

    So under this theory, all the dollars Americans send abroad in trade eventually return to the United States to buy goods or services from Americans, unless foreigners are foolish enough to keep those little colored pieces of paper instead of redeeming them for American products. Either way, Americans win.

    The trade-deficits-aren稚-bad argument concludes that the economies of both countries involved in unequal trade benefit by the exchanges. In fact, under the theory, the country with the trade deficit probably is actually making out better in trade deals than the country or countries with which it trades: Not only did it get a very good deal in trade, but the country or countries trading with it will boost its economy by buying its products or stocks or bonds.

    As has been said many times, 的t sounds good in theory; how does it stand up to reality?

    Assumptions, Assumptions
    Actually, there痴 good reason to see things this way because trade deficits are not necessarily bad. As Professor Williams also has pointed out, very often what foreign entities do with the money Americans send them for products is buy stocks or bonds in the United States, strengthening segments of America, or they open businesses here, such as Toyota did in Huntsville, Alabama. As well, often trade deficits are accompanied by less unemployment, increased GDP, more manufacturing output, and lower poverty rates, as related by the Cato Institute痴 Daniel Griswold in his article 鄭 Rising Trade Deficit Signals Good Times for U.S. Economy.

    However, observation of the economies of the world shows that the theory doesn稚 stand up well under all conditions. It is only true under certain conditions.

    Consider: If it is absolutely true that trade deficits don稚 matter, it must hold true, as well, that any size trade deficit doesn稚 matter even to the point that a country can purchase all goods from abroad, without consequence. But there is a very obvious consequence to such a course, namely currency crashes of which there have been 21 around the world in the past 25 years.

    Of the 21 countries that caused hyperinflation of their currencies, 17 were running trade deficits at the time their currencies imploded. One of the remaining four, Brazil, had deficits leading up to the crash, but not in the year that rapid inflation began because of newly imposed import restrictions; and another, Zimbabwe, didn稚 have trade deficits until several years after inflation began in earnest, but its foreign trade did drop dramatically before then, leading to hyperinflation. Of the two remaining countries, Poland and Russia, there were other factors involved that had a similar effect on their economies as trade deficits: Poland had a trade surplus with Russia, but Russia only actually paid for a small fraction of the goods it imported from Poland because Russia was becoming insolvent as well.

    In Russia, before its currency imploded, imports and exports usually balanced because the Western world didn稚 accept the ruble in trade Russia needed to barter or use gold in trade with Westerners but it still essentially ran deficits because in trade with the communist bloc, Russia often paid higher-than-world-market prices for goods it got from its trade partners in order to boost their failing economies. (For instance, Russia paid Cuba above-market prices for sugar.) Russia also gave direct aid to totalitarian governments so that they would follow Russia痴 foreign-policy lead.

    Is it merely coincidence that countries that have hyperinflated their currencies had trade deficits, or is it a pattern signifying a link?

    A currency hyperinflates when producers in a country can稚 produce enough goods create enough wealth to pay for government services, and the government decides to print money to pay for its employees and services. When people both at home and abroad realize that the currency produced by a country far outstrips the value of the saleable goods available in that country, price inflation runs rampant, and if enough money is printed, the currency can lose value rapidly, becoming virtually worthless. It is a truism that if a country purchased all goods from abroad, a country痴 currency would quickly devalue, providing a tie between trade deficits and currency crashes. (In truth, a country could provide services in exchange for goods, meaning a country would have to run a deficit in both goods and services to rapidly ruin its currency.) And hyperinflation often leads to pain for the people in those countries: starvation, rampant crime (post-crash in Russia, when criminals wanted something such as an apartment, the original owners often simply disappeared), lack of healthcare, etc., so trade deficits can definitely have downsides.

    Also, if it is strictly true that trade deficits are good things, it follows, too, that every country with a trade deficit should benefit. And that痴 obviously not true. In fact, when Third World countries open their doors to imports, and the peoples in them are supplied with goods from abroad far cheaper than they could get the goods domestically, their local industries can be overwhelmed before they can compete in world markets, shutting them down. Hence, the open doors cause the countries to have few jobs, and the people continue to live in Third World conditions, often holding such livelihoods as growing gardens or herding cows and living in mud and stick huts.

    Ironically, showing how open trade doors in Third World countries doesn稚 work is a case of generosity gone awry, as explained in the October 2011 article in Foreign Policy magazine entitled 滴aiti Doesn稚 Need Your Old T-shirt. When Americans give their old clothes to a charity such as World Vision, the charity then gives the clothes away in Third World nations, putting the local industries out of business. Then the out-of-work residents can no longer afford to buy food or other necessities. The author explains:

    World Vision, for example, spends 58 cents per shirt on shipping, warehousing, and distributing them, according to data reported by the blog Aid Watch well within the range of what a secondhand shirt costs in a developing country. Bringing in shirts from outside also hurts the local economy: Garth Frazer of the University of Toronto estimates that increased used-clothing imports accounted for about half of the decline in apparel industry employment in Africa between 1981 and 2000. Want to really help a Zambian? Give him a shirt made in Zambia.

    The article makes clear that people seldom starve or are malnourished in Third World countries because of a lack of available food; they go hungry because they cannot afford to buy the food.

    Almost counter-intuitively, gifts of food also further impoverish the poor. When President Bill Clinton sent subsidized rice to Haiti, his actions wiped out thousands of local rice farmers who could no longer sell their produce (an action Clinton is said to have deemed one of his most grievous mistakes).

    On the other hand, if a country has a trade deficit because it is buying production equipment so that it can soon produce items and run trade surpluses, a trade deficit could actually be a good thing. Take Malaysia as an example: In 1995, it had a worrisome trade deficit equal to nine percent of its gross national product, mainly as a result of importing capital goods for start-up enterprises. Since 1998, it has recorded consistent trade surpluses.

    More at: https://www.thenewamerican.com/econo...icits-are-good


    If you don't make anything you will run out of money to buy what others make and be unable to supply your own needs.
    NOW it is readable.
    There is no spoon.

  16. #15

    Default

    Quote Originally Posted by Zippyjuan View Post
    The US Trade Deficit with China is about $375 billion. Our steel imports from them? Less than $2 billion. These tariffs will have zero impact on our trade deficit.

    The steel industry currently employs about 80,000 people. They will benefit from the steel tariff. Millions are working in industries which use that steel. They will face higher costs and may lose some workers while consumers pay higher prices for final goods. A small number of people benefit while a much larger number are made worse off. When Bush similarly imposed a 30% tariff on steel in 2002 to protect US steel workers an estimated 200,000 jobs were lost in steel using industries. And the number working in the steel industry did not increase. It cost jobs- it didn't save them. It did not make the US better off.

    Quote Originally Posted by Swordsmyth View Post
    Trump is old enough to know that during the Korean War, president Harry Truman seized the U.S. steel industry to maintain production for America’s then-vulnerable wartime economy. During the Second World War, when the U.S. dominated the world’s steel production, rationing was nevertheless needed - the public was even exhorted to donate their automobile bumpers to the war effort as scrap steel.
    Today, the U.S. has not only lost much of its steel capacity, it’s at risk of losing the balance, making it dependent on a host of countries: Canada, its largest and most reliable foreign supplier, meets just five per cent of U.S. needs. According to the U.S. Commerce Department, the United States is now at risk of finding itself “in a position where it is unable to be certain it could meet demands for national defense and critical industries in a national emergency.” If dependent on a foreign country, the department warns, the U.S. would not have the legal authority to commandeer supplies as it could within the U.S.

    More at: https://www.zerohedge.com/news/2018-...-preparing-war
    Quote Originally Posted by Swordsmyth View Post
    There are thresholds below which you no longer have the capacity to rebuild in any reasonable length of time or before you are forced to surrender to the enemy, the south lost the war of northern aggression because as Rhett Butler puts it in Gone with the wind "there is not a cannon factory in the whole south".

    Steel is the backbone of any country's ability to defend itself.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  17. #16

    Default

    Quote Originally Posted by Ender View Post
    NOW it is readable.
    Whatever.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  18. #17

    Default

    Quote Originally Posted by Swordsmyth View Post
    Whatever.
    Sorry Dude, but these are called PARAGRAPHS.

    No one is going to read a wall of words and they will not be interested in going to the original post because NOTHING will have caught their eye.
    There is no spoon.

  19. #18

    Default

    Well , trade deficits probably do not matter in the US . Look at the past . It certainly has not alarmed anyone . Still trillions in taxes are collected ea yr and even more is spent by govt and unbacked paper dollars are printed and spent on cheap $#@! . It has already gone on for longer than a rational person would expect with no consequences ...........

  20. #19

    Default

    Quote Originally Posted by Superfluous Man View Post
    Ron Paul had some good things to say about this a couple years ago.
    https://mises.org/wire/ron-paul-protectionism-wont-help
    Ron Paul: Protectionism Won't Help
    03/23/2016Ryan McMaken

    In this video, Ron Paul and Daniel McAdams discuss whether or not protectionism will improve the American economy.

    Specifically, Paul and McAdams reference this article by Walter Williams in which Williams notes:

    Let's look at the political angst over trade deficits. A trade deficit is when people in one country buy more from another country than the other country's people buy from them. There cannot be a trade deficit in a true economic sense. Let's examine this.

    I buy more from my grocer than he buys from me. That means I have a trade deficit with my grocer. My grocer buys more from his wholesaler than his wholesaler buys from him. But there is really no trade imbalance, whether my grocer is down the street, in Canada or, God forbid, in China.

    Some quotes:

    Ron Paul goes on to make the following points:

    Trade deficits aren't a problem.

    It's a bad idea for politicians to complain about China since China has been financing the US's debt.

    Companies Leave in part because they're trying to preserve their assets from government intervention.

    "The marketplace doesn't exist for big business or profit. The market exists for the consumer. If you don't support the consumer, you go out of business."

    Even when we buy cheaper goods that are "dumped" on the market (i.e., subsidized by foreign governments) lower price goods are still a net gain for American consumers.
    There is no spoon.

  21. #20

    Default

    We still produce as much raw steel as we used to. But there are two factors driving down employment in the industry. One is more automation- fewer workers needed. The second is that we have been switching to recycling more steel- less costly than producing it from raw materials. That accounted for about two thirds of US steel in 2009. Imports account for less than one third of the steel we use- and most of that comes from Canada and Mexico who won't be cutting us off in a crisis.
    Last edited by Zippyjuan; 03-12-2018 at 03:55 PM.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  22. #21

    Default

    There is no such thing as a trade deficit.

    I go down to the local 7-11. I buy some snacks. I pay them. They give me food. Is there a trade deficit? Maybe on the surface, after all I didn't trade them any of my possessions for any of their possessions. They didn't get my TV or car or anything. But I did trade them the property I was willing to part with and which they wanted -money- in exchange for goods I wanted. That isn't a deficit. That is a win.

    Insisting that I should go home and first waste all my time building a car from scratch in order to go back and exchange that for what I wanted isn't smart. It is a stupid waste of time, resources, effort, and wealth producing a product that would've been produced more easily by someone else. And it wouldn't make me richer, it would make me poorer because instead of using my time wisely to work in some way that would add value to society and give me a greater, more flexible, source of wealth I am stuck doing more and getting less. It would degrade me, my home, and my standard of living.

    And that is what tariffs do to the people and countries- degrade them, make them poorer, and cause waste.

    Bastiat, explaining why a French tariff against cheap foreign steel was bad explains it succinctly:

    Now in all fairness, we must do justice to the arguments of this mine owner who wanted a tariff to increase domestic employment. His reasoning was not entirely false, but rather incomplete. In securing from the government a special privilege, he had correctly pointed out certain results that can be seen. But he completely ignored certain other effects that cannot be seen.

    True enough, the five-franc piece thus directed by law into the cash-box of the domestic producer does serve to stimulate the economy along the lines he predicted. That can easily be seen. But what is not seen is this: That five-franc piece comes, not from the moon, but from the pocket of some French citizen who must now pay 15 francs for the thing that cost him only 10 francs in a free market. And while the protected industrialist may well use the five francs to encourage national industry, the French citizen himself would also have used it for the same purpose, if he had been left free to do so. He would have used his five francs to buy a book, or shoes, or some other article or service he wanted. In either case, national industry as a whole would be stimulated by the same amount.

    Thus the new tariff law has resulted in this: The protected industry now makes a high profit to which it is not justly entitled. The average French citizen has been duped out of five francs by his government, and must therefore do without the article or service he would have bought with it. One segment of the economy has profited at the expense of many others. True enough, because of the artificial price increases, new jobs have been created in the protected industry. But what is not seen is the fact that the extra money now spent for iron must necessarily result in reduced spending for other products and services, and thus fewer jobs in those industries. And worst of all, the people have been encouraged to think that robbery is moral if it is legal.
    Indeed, the only people who prosper are those business with connections to political elites. The rest of us suffer as we pay more for less, and a more inferior product to boot. Here, Dean Russell from FEE has a good modern example.

    I sometimes suggest to my students in international marketing that the use of compensatory tariffs by the European Common Market today gives precisely the same result that Bastiat pointed out in his story, i.e., tariffs cause higher prices and a decrease in products and services always. The students seem to understand the idea better when I put the transaction in story form, a la Bastiat.

    “Take wheat, for example,” I begin. “And let’s follow the American owner as he enters a European port with a shipload of wheat grown in Kansas. The American owner wants to sell his wheat for, say, $3 a bushel. But the officials in the European Economic Community refuse to accept that low price and insist that the European purchasers must pay a much higher price.”

    At that, my students begin to look at me strangely. “You mean the European people insist on paying more for the wheat to bake their daily bread than they need to?”

    “That’s right,” I answer. And in spite of their doubting expressions, I continue with my story.

    “You see, while the Europeans believe in competition, it must be fair competition. And those vast wheat lands in Kansas are just better suited to grow wheat than are the small European farms. So it’s not fair competition—obviously. Further, those Kansas farmers have another big advantage, i.e., vast amounts of capital (farm machinery) that’s just not available to European farmers. The result is unfair competition, i.e., the costs of production for many wheat farmers in Europe are perhaps twice as high as in Kansas. And while most Europeans claim to favor the free market economy and open competition, naturally it must be fair competition. Everybody is in favor of competition, as long as it’s fair. And since fair competition is obviously impossible when the Americans enjoy those two big advantages, tariffs must be used to equalize the situation. Fair’s fair, you know.

    “First, the EEC officials check around Europe to find the cost of producing a bushel of wheat by the most inefficient wheat producer in all of Europe. The chances are that’ll be a French farmer who insists on growing grain on his land when the market says grapes or vegetables.

    “Once the costs of this most inefficient wheat farmer in all of Europe are determined, then the compensatory tariff to wipe out the American production-advantage is set so that European consumers will find little or no advantage in buying American wheat over French wheat. The price to them will be about the same.

    “That’s what most people seem to mean by ‘equal competition,’ i.e., tariffs to wipe out any advantage (natural or man-made) enjoyed by the foreign producer over the domestic producer. The result is that the Europeans must pay perhaps 100 percent more for their daily bread than would be necessary under free trade. And since there are always low-cost producers in any industry, those European wheat farmers who are more efficient than that marginal French wheat farmer just automatically reap high profits—while the people in general have less bread and other goods and services.”

    https://fee.org/articles/tariffs-are-legal-plunder/
    Which is one of the reasons poor people in America make more on average than the middle class in Europe.

    Tariffs impoverish the people and enrich the few anti-free market corporatists. Nothing more.
    溺aybe I forgot to mention something to you: I don稚 believe in queens. You think freedom is something you can give and take on a whim. But to your people, freedom is as essential as air. And without it, there is no life. There is only darkness. -Zaheer

    "A man chooses. A slave obeys."-Andrew Ryan

    "There are three things the parasite hates: free markets, free will, and free men."-Andrew Ryan

  23. #22

    Default

    Quote Originally Posted by oyarde View Post
    Well , trade deficits probably do not matter in the US . Look at the past . It certainly has not alarmed anyone . Still trillions in taxes are collected ea yr and even more is spent by govt and unbacked paper dollars are printed and spent on cheap $#@! . It has already gone on for longer than a rational person would expect with no consequences ...........
    We have seen plenty of consequences, the destruction of the middle class and the expansion of the welfare class are just the most prominent, the longer it goes on the worse the consequences will be, you are right that some of them have been delayed but they are just building up bigger for when they do hit.
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankindit痴 people I can稚 stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  24. #23

    Default

    Quote Originally Posted by Zippyjuan View Post
    The US Trade Deficit with China is about $375 billion. Our steel imports from them? Less than $2 billion. These tariffs will have zero impact on our trade deficit.

    The steel industry currently employs about 80,000 people. They will benefit from the steel tariff. Millions are working in industries which use that steel. They will face higher costs and may lose some workers while consumers pay higher prices for final goods. A small number of people benefit while a much larger number are made worse off.

    We already know what will happen because this is not the first time we have done this. When Bush similarly imposed a 30% tariff on steel in 2002 to protect US steel workers an estimated 200,000 jobs were lost in steel using industries. And the number working in the steel industry did not increase. It cost jobs- it didn't save them. It did not make the US better off.



    And our trade deficit grew.



    https://tradingeconomics.com/united-...lance-of-trade
    Take a look at your second graph, Zip. That right there is the answer to the first. Jobs were already bleeding out before that tariff went into effect. It had nothing to do with the tariff. It had everything to do with the deficit.
    Theye have refused their Assent to Laws, the most wholesome and necessary for the public good.

    Theye have erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

    Theye kept among us, in times of peace, Standing Armies

    Theye have combined with others to subject us to a jurisdiction foreign to our constitution,

    For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

    For cutting off our Trade with parts of the world:

    For imposing Taxes on us without our Consent:

    For depriving us in many cases, of the benefit of Trial by Jury:

    Theye plundered and destroyed the lives of our people.

    Theye are at this time transporting Armies of Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy of a civilized nation.

  25. #24

    Default

    Tariff technically hasn't gone into effect. March 23rd is stated effective date according to Trump's proclamation. Whether that proclamation carries any legal authority is unclear.

    Without trade deficits there is no dollar world reserve status. Just sayin...

    http://plata.com.mx/enUS/More/346?idioma=2
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  26. #25

    Default

    Quote Originally Posted by Swordsmyth View Post
    If you don't make anything you will run out of money to buy what others make and be unable to supply your own needs.
    This is economic ignorance on display.
    __________________________________________________ ________________
    "A politician will do almost anything to keep their job, even become a patriot" - Hearst

  27. #26

    Default

    Quote Originally Posted by devil21 View Post
    Tariff technically hasn't gone into effect. March 23rd is stated effective date according to Trump's proclamation. Whether that proclamation carries any legal authority is unclear.

    Without trade deficits there is no dollar world reserve status. Just sayin...

    http://plata.com.mx/enUS/More/346?idioma=2
    We know what happened with Bush 30% tariffs on steel in 2002. Steel shortages for producers, an estimated 200,000 jobs lost and no additional jobs in the steel mills.
    Quote Originally Posted by NorthCarolinaLiberty View Post

    Half the crap I write here is just to entertain myself.
    I am Zippy and I approve of this post. But you don't have to.

  28. #27

    Default

    Quote Originally Posted by Zippyjuan View Post
    We know what happened with Bush 30% tariffs on steel in 2002. Steel shortages for producers, an estimated 200,000 jobs lost and no additional jobs in the steel mills.
    Sportin' a new Q avatar, eh Zip? I think I get the reference on multiple levels. Clever
    "Let it not be said that we did nothing." - Ron Paul

    The entire internet is the domain of paid shills and bots. If you don't know this by now....

    Israel, under control of the Crown and, ultimately, the Vatican, own the USA. If you don't know this by now....

    Talk to people about liberty. You won't find it on websites, you won't find it in politicians.

    Visiting the Outer Banks of NC?
    Outer Banks NC Fishing Boat Rentals

  29. #28

    Default

    Well, I made it halfway through the article before discovering the entire argument is framed in terms of dollars....

    ...at which point I realized that you might as well be talking about your D&D campaign.

    Dollars aren't real. Any reality you think they impose on a system can be changed, on a whim, overnight. All it takes is for those in power to make the decision, and they can turn part or even all of it into vapor.

    Any discussion of a system built on such sand is of no interest to me, and shouldn't be of interest to anyone remotely interested in liberty.
    There are no crimes against people.
    There are only crimes against the state.
    And the state will never, ever choose to hold accountable its agents, because a thing can not commit a crime against itself.

  30. #29

    Default

    As Professor Williams also has pointed out, very often what foreign entities do with the money Americans send them for products is buy stocks or bonds in the United States, strengthening segments of America,...
    Such as the real estate segment. If foreigners purchase enough real estate, the industry will respond to demand and create more real estate.
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

  31. #30

    Default

    Quote Originally Posted by Swordsmyth View Post
    We have seen plenty of consequences, the destruction of the middle class and the expansion of the welfare class are just the most prominent, the longer it goes on the worse the consequences will be, you are right that some of them have been delayed but they are just building up bigger for when they do hit.
    The destruction of the middle class and expansion of the welfare state are real problems. The causes and solutions (if any) are the question. Platitudes do not help, and often make the political situation worse. Thus we now have generations that believe socialism is the answer, and capitalism is evil.
    Twitter: B4Liberty@USAB4L
    "Foreign aid is taking money from the poor people of a rich country, and giving it to the rich people of a poor country." - Ron Paul
    "Beware the Military-Industrial-Financial-Corporate-Media-Government Complex." - B4L update of General Dwight D. Eisenhower
    "Debt is the drug, Wall St. Banksters are the dealers, and politicians are the addicts." - B4L
    "Totally free immigration? I've never taken that position. I believe in national sovereignty." - Ron Paul


    The views and opinions expressed here are solely my own, and do not represent this forum or any other entities or persons.

Page 1 of 3 123 LastLast





Similar Threads

  1. Trade Deficits: Will Protectionism Help?
    By jct74 in forum Ron Paul Forum
    Replies: 3
    Last Post: 03-26-2016, 06:18 PM
  2. Replies: 2
    Last Post: 10-04-2013, 07:56 PM
  3. Aren't trillion dollar deficits a good thing??
    By socialize_me in forum Grassroots Central
    Replies: 10
    Last Post: 01-19-2009, 10:51 PM
  4. Replies: 10
    Last Post: 01-07-2009, 06:20 PM
  5. Trade Deficits, Peter Schiff, and protectionism
    By Andrew-Austin in forum Economy & Markets
    Replies: 2
    Last Post: 12-05-2008, 08:29 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •