Trade Deficit

... Why do you feel imports are not detrimental to domestic production when every dollar of imports clearly
reduces GDP?
ToddsterPatriot, because annual trade deficits, rather than global trade is net detrimental to their nation's GDP.
Respectfully, Supposn
 
no idea how trade wars are good? Care to tell us?
regardless of individual global trading nations' policies and practices, competition, differences of interpretations, and what you describe as trade wars do occur among them. The Import Certificate policy is entirely compatible to the concept of “most favored nation” agreements. It will no more or less (than pure free trade), precipitate a trade war.
I have no doubt that you believe otherwise. Explicitly describe an example that we may discuss.

Import Certificate policy is to the advantage of any nation that otherwise would experience annual trade deficits of goods. If you're correct, (i.e. if the policy would cause more trade wars), I choose the economic advantage rather than the financial detriment of USA employees and their families. Unlike some other nations, USA's median wages purchasing powers has not been doing well during this last half-century.


Respectfully, Supposn
 
... Why do you feel imports are not detrimental to domestic production when every dollar of imports clearly
reduces GDP?
ToddsterPatriot, because annual trade deficits, rather than global trade is net detrimental to their nation's GDP.
Respectfully, Supposn

because annual trade deficits, rather than global trade is net detrimental to their nation's GDP.

I showed you, and you agreed, that every dollar of imports reduces GDP.
 
I showed you, and you agreed, that every dollar of imports reduces GDP.
Not necessarily the case. They may facilitate increased gdp when exported at a profit as part of a product.
CNM, to the extent that imported products contributed to their nation's exports, that would have reduced the extent of the nation's annual trade deficit. However, annual trade deficits are always net detrimental to their nation's GDPs.

Respectfully, Supposn
 
ToddsterPatriot, because annual trade deficits, rather than global trade is net detrimental to their nation's GDP. ...
I showed you, and you agreed, that every dollar of imports reduces GDP.
ToddsterPatriot, there's no contradiction. Imports and exports cancel each other out and have no effect upon GDP unless one exceeds the other. USA spent a finite amount of dollars purchasing final products during the year.

We increase that amount by our exports because we produced them, but they were purchased by foreign buyers that were not included within the amounts paid by USA purchasers.

We decrease that amount by our imports because we did not produce them. But they were purchased by USA buyers and included within the amounts paid by USA purchasers. ...
It's that simple. Respectfully, Supposn
 
ToddsterPatriot, because annual trade deficits, rather than global trade is net detrimental to their nation's GDP. ...
I showed you, and you agreed, that every dollar of imports reduces GDP.
ToddsterPatriot, there's no contradiction. Imports and exports cancel each other out and have no effect upon GDP unless one exceeds the other. USA spent a finite amount of dollars purchasing final products during the year.

We increase that amount by our exports because we produced them, but they were purchased by foreign buyers that were not included within the amounts paid by USA purchasers.

We decrease that amount by our imports because we did not produce them. But they were purchased by USA buyers and included within the amounts paid by USA purchasers. ...
It's that simple. Respectfully, Supposn

Imports and exports cancel each other out and have no effect upon GDP unless one exceeds the other.

Wrong, as you already admitted.

Assume we have a $1,000,000,000 trade surplus.
Holding everything else constant, an additional $500,000,000 in imports reduces GDP by $500,000,000.
Holding everything else constant, an additional $1,000,000,000 in imports reduces GDP by $1,000,000,000.
Holding everything else constant, an additional $2,000,000,000 in imports reduces GDP by $2,000,000,000.

It's that simple.
 
Imports and exports cancel each other out and have no effect upon GDP unless one exceeds the other.

Wrong, as you already admitted.

Assume we have a $1,000,000,000 trade surplus.
Holding everything else constant, an additional $500,000,000 in imports reduces GDP by $500,000,000.
Holding everything else constant, an additional $1,000,000,000 in imports reduces GDP by $1,000,000,000.
Holding everything else constant, an additional $2,000,000,000 in imports reduces GDP by $2,000,000,000.

It's that simple.
ToddsterPatriot, OK, I now see what you're thinking.

Assuming USA's 2019 GDP will have reached exactly 1 billion dollars on January 10 of 2019;
USA had a grand holiday and didn't produce anything for the next 5 days because we will all oversleep until January 16, 2019.

At 1 AM. January 16, 2019, we will purchas and receive and enter into our account books the transactions for a half billion dollars of imports.

Consequentially the USA will spend 1.5 billion dollars by January 16, and USA's GDP up to then will be
($1.5B – $0.5B) = $1.0 billion, which will be no change from our GDP between the first and the 16th day of January 2019.

Are we now on the same page? Respectfully, Supposn
 
Imports and exports cancel each other out and have no effect upon GDP unless one exceeds the other.

Wrong, as you already admitted.

Assume we have a $1,000,000,000 trade surplus.
Holding everything else constant, an additional $500,000,000 in imports reduces GDP by $500,000,000.
Holding everything else constant, an additional $1,000,000,000 in imports reduces GDP by $1,000,000,000.
Holding everything else constant, an additional $2,000,000,000 in imports reduces GDP by $2,000,000,000.

It's that simple.
ToddsterPatriot, OK, I now see what you're thinking.

Assuming USA's 2019 GDP will have reached exactly 1 billion dollars on January 10 of 2019;
USA had a grand holiday and didn't produce anything for the next 5 days because we will all oversleep until January 16, 2019.
At 1 AM. January 16, 2019, we will purchase, and receive, and enter into our account books, the transactions for a half billion dollars of imports.

Consequentially the USA will spend 1.5 billion dollars by January 16, and USA's GDP up to then will be
($1.5B – $0.5B) = $1.0 billion, which will be no change from our GDP between the first and the 16th day of January 2019.

Are we now on the same page? Respectfully, Supposn
 
Imports and exports cancel each other out and have no effect upon GDP unless one exceeds the other.

Wrong, as you already admitted.

Assume we have a $1,000,000,000 trade surplus.
Holding everything else constant, an additional $500,000,000 in imports reduces GDP by $500,000,000.
Holding everything else constant, an additional $1,000,000,000 in imports reduces GDP by $1,000,000,000.
Holding everything else constant, an additional $2,000,000,000 in imports reduces GDP by $2,000,000,000.

It's that simple.
ToddsterPatriot, OK, I now see what you're thinking.

Assuming USA's 2019 GDP will have reached exactly 1 billion dollars on January 10 of 2019;
USA had a grand holiday and didn't produce anything for the next 5 days because we will all oversleep until January 16, 2019.

At 1 AM. January 16, 2019, we will purchas and receive and enter into our account books the transactions for a half billion dollars of imports.

Consequentially the USA will spend 1.5 billion dollars by January 16, and USA's GDP up to then will be
($1.5B – $0.5B) = $1.0 billion, which will be no change from our GDP between the first and the 16th day of January 2019.

Are we now on the same page? Respectfully, Supposn

Consequentially the USA will spend 1.5 billion dollars by January 16, and USA's GDP up to then will be
($1.5B – $0.5B) = $1.0 billion, which will be no change from our GDP between the first and the 16th day of January 2019.


Are you telling me, after railing endlessly against trade deficits, that they actually have zero impact on our GDP?
 
... Consequentially the USA will spend 1.5 billion dollars by January 16, and USA's GDP up to then will be
($1.5B – $0.5B) = $1.0 billion, which will be no change from our GDP between the first and the 16th day of January 2019. ...

Are you telling me, after railing endlessly against trade deficits, that they actually have zero impact on our GDP?
No, I'm telling you that the entire economic difference between a similar domestic or an imported product occurs prior to the domestic product reaching its producer's shipping platform, or prior to the imported product began being handled entirely by domestic entities and labor. That half billion dollars spent for imported products crowded a half billion dollars of domestic goods out of our markets.

Additionally, it reduced what would otherwise have been USA production by some amount in excess of a half billion dollars.
Respectfully, Supposn
The costs and benefits of producing or importing:

The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the price value of globally traded products. But there's often additional production supporting goods and services that are not fully paid for by product producers, and are not reflected within the products price valuation.

For example, it's not unusual for governments and universities to boost local economies by providing producers with valuable research and development at lesser than market value or costs; government infrastructure that favors an important producer or industries; training and education tailored to serve a particular company or industry. These all increase their nation's GDP but if they are not reflected within the prices of exported products, exports full contributions to the nation's GDP are not attributed to the nation's global trade.

OK, national trade surpluses are understated, but doesn't that mean the importing nation's getting a bargain; they're getting more than they paid for? Well yes and no.

The exporting nation is the nation that earned the benefits of production. It is their nation that gains the knowledge and experience derived from using the tools and manipulating the materials of production. It is their universities that produced the research and development. It is their nation that built and improved the infrastructures that supported their producers and also serves others.

The reduced costs of imported products rather than domestic production costs are often at some costs to our government. To the extent laid-off workers previous incomes cannot be sustained, the enterprise's costs savings are often to some extent reflected by government's reduced tax revenues and increase unemployment costs.

When a service enterprise is displaced, other enterprises are often established elsewhere in the nation. Production of goods very often do not require close proximity to the customer and are often outsourced to lower wage rate nations.

It's unusual for a commercial enterprise not to require some products or services of other enterprises. Production moved beyond our borders, are usually supported by foreign enterprises. Even if a production supporting enterprise have other customer and/or serves other industries, their lesser production or sales volumes may increase their per-unit costs to the extent that they too cannot continue functioning within the nation.

There are benefits and costs of production; there are far fewer benefits and significant costs for nations that do not produce. ...
 
... Consequentially the USA will spend 1.5 billion dollars by January 16, and USA's GDP up to then will be
($1.5B – $0.5B) = $1.0 billion, which will be no change from our GDP between the first and the 16th day of January 2019. ...

Are you telling me, after railing endlessly against trade deficits, that they actually have zero impact on our GDP?
No, I'm telling you that the entire economic difference between a similar domestic or an imported product occurs prior to the domestic product reaching its producer's shipping platform, or prior to the imported product began being handled entirely by domestic entities and labor. That half billion dollars spent for imported products crowded a half billion dollars of domestic goods out of our markets.

Additionally, it reduced what would otherwise have been USA production by some amount in excess of a half billion dollars.
Respectfully, Supposn
The costs and benefits of producing or importing:

The expenditure formula itself only reduces or increases GDP by the nation's net trade balance which is based upon the price value of globally traded products. But there's often additional production supporting goods and services that are not fully paid for by product producers, and are not reflected within the products price valuation.

For example, it's not unusual for governments and universities to boost local economies by providing producers with valuable research and development at lesser than market value or costs; government infrastructure that favors an important producer or industries; training and education tailored to serve a particular company or industry. These all increase their nation's GDP but if they are not reflected within the prices of exported products, exports full contributions to the nation's GDP are not attributed to the nation's global trade.

OK, national trade surpluses are understated, but doesn't that mean the importing nation's getting a bargain; they're getting more than they paid for? Well yes and no.

The exporting nation is the nation that earned the benefits of production. It is their nation that gains the knowledge and experience derived from using the tools and manipulating the materials of production. It is their universities that produced the research and development. It is their nation that built and improved the infrastructures that supported their producers and also serves others.

The reduced costs of imported products rather than domestic production costs are often at some costs to our government. To the extent laid-off workers previous incomes cannot be sustained, the enterprise's costs savings are often to some extent reflected by government's reduced tax revenues and increase unemployment costs.

When a service enterprise is displaced, other enterprises are often established elsewhere in the nation. Production of goods very often do not require close proximity to the customer and are often outsourced to lower wage rate nations.

It's unusual for a commercial enterprise not to require some products or services of other enterprises. Production moved beyond our borders, are usually supported by foreign enterprises. Even if a production supporting enterprise have other customer and/or serves other industries, their lesser production or sales volumes may increase their per-unit costs to the extent that they too cannot continue functioning within the nation.

There are benefits and costs of production; there are far fewer benefits and significant costs for nations that do not produce. ...

That half billion dollars spent for imported products crowded a half billion dollars of domestic goods out of our markets.

But you just showed, using the GDP formula, that GDP was the same before and after the import.
 
That half billion dollars spent for imported products crowded a half billion dollars of domestic goods out of our markets.

But you just showed, using the GDP formula, that GDP was the same before and after the import.
ToddsterPatriot, the example demonstrated that despite the USA spending a half billion additional dollars for final products, rather than increasing USA's GDP by more than a half billion, the GDP remained the same.

Unlike spending for domestic products, spending for trade deficits somewhat reduces, rather than increasing their nation's GDP. But GDP can only report what has been actually domestically produced in spite of our negative exports.

GDP cannot report what may have been produced if we did not spend for negative exports. Annual trade surplusses always increase, and trade deficits always decrease their nation's GDP more than otherwise. The extent of global trades' actual effects upon their nation's GDPs almost always, (if not always) exceeds, and is never less than the extent of their nation's net global balance of trade.

Respectfully, Supposn
 

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