In Defense of Trade Deficits

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This topic contains 2 replies, has 3 voices, and was last updated by Profile photo of mary guercio mary guercio 2 weeks, 3 days ago.

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  • #2309
    Profile photo of Creigh Gordon
    Creigh Gordon
    Moderator

    I see on the news that our President is meeting today with the President of South Korea. One of the agenda items is “renegotiating our trade deficit” with South Korea.

    It is of course a point of logic that a country can only consume what it can produce for itself, or what it can acquire from another country through trade.

    One of the things we produce in this country is US dollars. For reasons that neither you or I have to understand, people in other countries are willing to trade stuff, including lots of manufactured goods, for our dollars. They do this because they want the dollars more than they want the goods, and we do it because we want the goods more than we want the dollars. It’s totally voluntary on both sides, or it wouldn’t happen.

    Eventually, this will come to an end. People in other countries will no longer be as eager to accept our dollars for their goods, at least not to the extent that they do now. At that point, they will be holding lots of US dollars, and presumably will want to trade those dollars for something else. They will come to the market with those dollars, and mutually agreeable transactions will occur. Maybe they will want to buy something we have manufactured, or maybe they will want to buy your house. If you like the offer, you will probably accept it. Again, it will be totally voluntary on both sides, or it won’t happen.

    At this point I have no idea what will be “renegotiated.”

  • #2310
    Profile photo of Aaron Dow
    Aaron Dow
    Participant

    I think one of the things I was most hoping for under a Trump administration is that he would claim to ‘look into’ and ‘renegotiate’ ‘better deals’ on, like, everything, and then tell everyone that he did and not change a damn thing (like for instance the TPP and Paris Accord, in which we, you know, got exceptional deals, being that whole American exceptionalism thing, y’know).

    But nope. Homeboy actually does want to destroy things because they’re not ‘his’ deals. Fucker.

    • #2383
      Profile photo of mary guercio
      mary guercio
      Moderator

      Worse, this Homeboy has a cabinet filled with people who can’t wait to destroy everything under their authority that was passed in the last 8 years – regardless of merit or consequence. I keep thinking that one day America is going to wake up and look around at what is being done to dismantle America. Let us hope there is something left to save.

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