Trade Deficit

Discussion in 'Economy' started by shoooot9, Mar 14, 2006.

  1. shoooot9
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    shoooot9 Rookie

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    It is obvious that something must be done about the exponentially growing budget deficit. More importantly, the trade deficit, which is a huge problem, and is mostly a result of billions of dollars owed to foreign countries. America and the government must do something in order to set imports and exports at equilibrium. Currently, our imports far exceed our exports due to the fact that these foreign power nations are making many products found in America, but at a much cheaper price. In order to reduce trade deficit we must compete with these nations. We can not allow foreign countries to steal some of our GDP. The American producers must fight to compete with foreign prices and the American people most make a stand on domestic consumption.

    Let me hear your thoughts on this topic?
     
  2. MtnBiker
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    MtnBiker Senior Member

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    How are the budget deficit and trade deficit related?
     
  3. Mr. P
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    Mr. P Senior Member

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    Socialize the Country, first get rid of Bush. That'll do er.
    Tis what ya wanna hear ain't it?
     
  4. shoooot9
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    shoooot9 Rookie

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    Well if we reduce trade deficit that means we will be increasing domestic production and consumption, which increases total consumer expenditures and strenghtens economic activity. When this happens government budget deficit decreases due to more domestic consumption and less government intervention.
     
  5. Said1
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    To my knowledge, trade isn't measured accurately, meaning that all things imported are considered imports, even if they are "outsourced" items. Reducing imports doesn't automatically equate increased manufacturing and services provided at home as your scenario would indicate.
     
  6. dmp
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    dmp Senior Member

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    Unions. :(
     
  7. shoooot9
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    shoooot9 Rookie

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    Thats true even if import deficits are reduced that does not automatically mean increase in total consumption because exports or outsources play a significant roll. Overall, something should be done about trade deficit.
     
  8. MtnBiker
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    MtnBiker Senior Member

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    I believe that it is an assumption that we would increase consumption by importing less from other countries. Wouldn't our consumption remain steady with current demand given the price for goods were the same regardless of country of origin?
     
  9. MtnBiker
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    The budget has less to do with consumer consumption then Congressional spending. Lets reduce pork spending.
     
  10. shoooot9
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    shoooot9 Rookie

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    Yes, consumption would stay the same if prices are stagnant, but they are not, I am trying to say that foreign countries are producing the same products, however at a much cheaper price. So this means that demand is greater for these products when prices are cheaper and they usually are outside America. This means that if Americans can buy the same products for the same cheaper price as they can from imports, then demand for products domestically will increase and so will total GDP.
     

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