Are Countries With Trade Surpluses Economically Stronger?

[expat_panama]

from: Are Countries With Trade Surpluses Economically Stronger?

MERRILL MATTHEWS 6:50 PM ET

Few concepts in economics are more misunderstood than the balance of trade. People seem to assume that a trade deficit is bad and a trade surplus is good, just as budget deficits — or big ones — are bad while budget surpluses are good. No president has made more of this issue than Donald Trump, who just signed an executive order asking for an assessment of "the major causes of the trade deficit."

In his February address to a joint session of Congress, Mr. Trump reiterated, "Our trade deficit in goods with the world last year was nearly $800 billion dollars." Actually, it was about $750 billion...


...The president seems to imply that countries with a trade surplus are economically stronger than countries with a trade deficit. But as the table below shows, no discernible pattern emerges.

Of the 10 largest economies with trade surpluses in 2015, only two had much stronger GDP growth than the U.S.

... wrong way to do it is by limiting consumers' choices, which an import tariff would do.

Trying to revive American manufacturing is laudable — if it is done by removing barriers and creating an economic climate that allows companies and workers to be more competitive in a global economy. Mr. Trump should shelve his tariff for the time being and see if his other reforms will achieve his goal.​

 

[william the wie]

While I largely agree with your post where can Trump get the votes to pass his tax plan without BATty or something worse?

 

[expat_panama]

...where can Trump get the votes to pass his tax plan...

That's the kind of thinking many subscribe to but I find it unconvincing.

Everyone wanted to dump Obamacare and only some of those wanted a 'replacement' in kind. There'd been polls that supposedly suggested that a big majority wanted something called "preexisting condition coverage" which was in fact simply gov't controlled healthcare. From that Trump pushed what most saw as nothing more than Obamacare w/ lipstick --and failed.

The big problem now is that the new regime hasn't learned anything and seems to be just doubling down on stupid --attacking conservatives who'd ordinarily just looove a good tax plan. Tax hikes on imports (imho) is not a good tax plan and tax cuts for businesses is a good plan.

My hunch is that I'm not alone w/ this view.

 

[Toro]

No

The idea that trade is a zero-sum game and trade surpluses inherently good is thinking right out of the 19th century.

 

[Correll]

from: Are Countries With Trade Surpluses Economically Stronger?

MERRILL MATTHEWS 6:50 PM ET

Few concepts in economics are more misunderstood than the balance of trade. People seem to assume that a trade deficit is bad and a trade surplus is good, just as budget deficits — or big ones — are bad while budget surpluses are good. No president has made more of this issue than Donald Trump, who just signed an executive order asking for an assessment of "the major causes of the trade deficit."

In his February address to a joint session of Congress, Mr. Trump reiterated, "Our trade deficit in goods with the world last year was nearly $800 billion dollars." Actually, it was about $750 billion...


...The president seems to imply that countries with a trade surplus are economically stronger than countries with a trade deficit. But as the table below shows, no discernible pattern emerges.

Of the 10 largest economies with trade surpluses in 2015, only two had much stronger GDP growth than the U.S.

... wrong way to do it is by limiting consumers' choices, which an import tariff would do.

Trying to revive American manufacturing is laudable — if it is done by removing barriers and creating an economic climate that allows companies and workers to be more competitive in a global economy. Mr. Trump should shelve his tariff for the time being and see if his other reforms will achieve his goal.​

Your argument is the same one that has been made for the last 50 years.

Meanwhile our Industrial heartland is now called the RUst Belt and Japan, South Korean and now China have/are becoming FIrst World Nations built on Trade Surpluses with US.

 

[Correll]

No

The idea that trade is a zero-sum game and trade surpluses inherently good is thinking right out of the 19th century.

Don't tell US, tell our trade partners who all just happen to have massive trade surpluses.


I'm sure that is NOT a result of their trade policies, probably just a coincidence.


And since Trade deficits are NOT bad, there shouldn't be any resistance to us all switching up surpluses/deficits, right?

 

[Toro]

No

The idea that trade is a zero-sum game and trade surpluses inherently good is thinking right out of the 19th century.

Don't tell US, tell our trade partners who all just happen to have massive trade surpluses.


I'm sure that is NOT a result of their trade policies, probably just a coincidence.


And since Trade deficits are NOT bad, there shouldn't be any resistance to us all switching up surpluses/deficits, right?

America's biggest trading partner is Canada, with whom America has a trade surplus.

Not that it matters.

 

[william the wie]

I think this discussion is using the wrong metrics. The proper metrics are:

Fragility

Shrinking Big Brother

 

[The Sage of Main Street]

from: Are Countries With Trade Surpluses Economically Stronger?

MERRILL MATTHEWS 6:50 PM ET

Few concepts in economics are more misunderstood than the balance of trade. People seem to assume that a trade deficit is bad and a trade surplus is good, just as budget deficits — or big ones — are bad while budget surpluses are good. No president has made more of this issue than Donald Trump, who just signed an executive order asking for an assessment of "the major causes of the trade deficit."

In his February address to a joint session of Congress, Mr. Trump reiterated, "Our trade deficit in goods with the world last year was nearly $800 billion dollars." Actually, it was about $750 billion...


...The president seems to imply that countries with a trade surplus are economically stronger than countries with a trade deficit. But as the table below shows, no discernible pattern emerges.

Of the 10 largest economies with trade surpluses in 2015, only two had much stronger GDP growth than the U.S.

... wrong way to do it is by limiting consumers' choices, which an import tariff would do.

Trying to revive American manufacturing is laudable — if it is done by removing barriers and creating an economic climate that allows companies and workers to be more competitive in a global economy. Mr. Trump should shelve his tariff for the time being and see if his other reforms will achieve his goal.​

Saying That the Rich Create Jobs Is Like Saying That Vampires Create Blood. That Sucks!

Another excuse for corporate parasites to eat away at their employees' paychecks. Termites bring on Terminal Capitalism. Dynasties will become dust. Setting up their brats is the most important thing to them, but this way leads to the guillotine.

 

[Eloy]

I'm afraid statistics about economies can be very deceptive. The opening post complicates understanding. Look at Ireland with a whopping 7.8% GDP growth. This appears to be a thriving economy which is generating wealth that is enviable but the statistic is deceptive. What if I told you that Ireland's GDP growth never fell below 24.3% for the year 2015. Great, yes? Actually, No.
Ireland GDP Annual Growth Rate | 1998-2017 | Data | Chart | Calendar
The statistic of a growth rate does not give us much information on the health of an economy. In Ireland's case, one of the two countries which was far higher than the USA which you draw attention to, the growth rate is a fiction. As explained an report in THE IRISH TIMES of last July, what happened was that a number of American corporations took advantage of Ireland's low corporation tax rate and moved their productive assets from all trading outside of the USA to Ireland giving the ridiculously high GDP growth percentage, the highest in the euro area. Still good for Ireland? No, because these profits actually belonged to American companies which paid only a minimal 2.5% tax to Ireland and held the rest for eventual payment to the U.S. Treasury, enjoying American tax law which is particularly generous to multinational corporations which are given years and years before settling debts to the United States. So, beware of statistics when discussing economics. As the report in the Irish newspaper put it: "Everybody knows that the 26 per cent plus growth rate recorded for 2015 may be a statistical fact, but in terms of reflecting what is actually going on it is clearly a fiction."
Ireland’s GDP figures: Why 26% economic growth is a problem

 

[expat_panama]

...the Rich... ...corporate parasites... ...to the guillotine.

Huh, sounds like a threat. [ignore member]

 

[expat_panama]

I'm afraid statistics about economies can be very deceptive...

Maybe we want to say that it's not the numbers that lie, but rather it's the liars that use numbers. The assertion we've heard is that trade deficits hurt, and what I'm getting here is that the numbers don't seem to back that up.

 

[Correll]

No

The idea that trade is a zero-sum game and trade surpluses inherently good is thinking right out of the 19th century.

Don't tell US, tell our trade partners who all just happen to have massive trade surpluses.


I'm sure that is NOT a result of their trade policies, probably just a coincidence.


And since Trade deficits are NOT bad, there shouldn't be any resistance to us all switching up surpluses/deficits, right?

America's biggest trading partner is Canada, with whom America has a trade surplus.

Not that it matters.

If it doesn't matter, then what's the problem?

Give us what we want and everyone can be happy.

 

[Onyx]

No

The idea that trade is a zero-sum game and trade surpluses inherently good is thinking right out of the 19th century.

Trump is clueless about economics.

 

[Onyx]

And since Trade deficits are NOT bad, there shouldn't be any resistance to us all switching up surpluses/deficits, right?

I don't have the energy to explain how retarded you sound.

 

[Correll]

And since Trade deficits are NOT bad, there shouldn't be any resistance to us all switching up surpluses/deficits, right?

I don't have the energy to explain how retarded you sound.

People keep telling us that trade deficits don't matter.

So, then why all the resistance? If it doesn't matter, give us what we want, and then after a few years, when nothing changes, you can gloat and laugh, and tell us that you told us so.

Right?

 

[expat_panama]

...Trump is clueless about economics.

It sure seems that way but the cheering he gets when he says stupid econ stuff makes me think he's ok w/ econ and super smart w/ politics. Then again, after watching the obamacare fiasco and now the foot-dragging w/ tax cuts, we may want to revisit our first take...

 

[The Sage of Main Street]

...the Rich... ...corporate parasites... ...to the guillotine.

Huh, sounds like a threat. [ignore member]

Go On, Goon

Bootlicking Mamas' Boys hate their Daddies for not getting rich and spoiling them. You are pawns who can be bypassed to get at the key targets.

 

[EdwardBaiamonte]

from: Are Countries With Trade Surpluses Economically Stronger?

MERRILL MATTHEWS 6:50 PM ET

Few concepts in economics are more misunderstood than the balance of trade. People seem to assume that a trade deficit is bad and a trade surplus is good, just as budget deficits — or big ones — are bad while budget surpluses are good. No president has made more of this issue than Donald Trump, who just signed an executive order asking for an assessment of "the major causes of the trade deficit."

In his February address to a joint session of Congress, Mr. Trump reiterated, "Our trade deficit in goods with the world last year was nearly $800 billion dollars." Actually, it was about $750 billion...


...The president seems to imply that countries with a trade surplus are economically stronger than countries with a trade deficit. But as the table below shows, no discernible pattern emerges.

Of the 10 largest economies with trade surpluses in 2015, only two had much stronger GDP growth than the U.S.

... wrong way to do it is by limiting consumers' choices, which an import tariff would do.

Trying to revive American manufacturing is laudable — if it is done by removing barriers and creating an economic climate that allows companies and workers to be more competitive in a global economy. Mr. Trump should shelve his tariff for the time being and see if his other reforms will achieve his goal.​

trade deficits are very bad for sure. they mean people don't want to buy your stuff. Its good when your stuff is so good everyone wants to buy it.

 

[expat_panama]

trade deficits are very bad for sure. they mean people don't want to buy your stuff...

No it doesn't, it means people are willing to buy from you what they want --and that's how it's always been.

That 'trade deficit' story is when foreigners want to buy stuff like buildings, designs, businesses, and all they got to trade for 'em is goods'n'services. So fine. I sell the Chinese two thousand bux of Chinese stocks (that I bot last year for $1 thousand) and I buy Chinese gold. That's what a trade deficit is, one year I've got nothing and this year I've got $1K in gold.

Americans are good at that.