Mr. Trump, Here's Why Trade Deficits Are Good

[usmbguest5318]

The/my answer is no. Instead they should pursue one or several of the tactics Dr. Bernanke suggests in the article.

which one and why not do nothing?????

The answer to that question is in the essay.

 

[EdwardBaiamonte]

The answer to that question is in the essay.

dear, the answer to all questions are in essays but we're here to debate. Do you understand?

 

[usmbguest5318]

The answer to that question is in the essay.

dear, the answer to all questions are in essays but we're here to debate. Do you understand?

Dear,
If I had different stratagems to offer or took exception with the ones in the essay, I'd offer them. I don't, and the approaches Dr. Bernanke describes are not mutually exclusive, and they are easily understood, and I'm not German, and the U.S. doesn't have a trade surplus, so what is there for me to debate?

As I understand Germany's situation, there were three primary factors causing their trade surplus:

• increases to the German saving rate,
• increases in to "rest of the world" (ROW) demand for German exports, and
• German labor market reforms (e.g., cuts in unemployment and pension benefits in the wake of the news about the demographics of the German population -- Basically, Germany decided that there were too many Germans retiring too soon, collecting too much money and doing so for too long and realized that people live a lot longer now than when the system was designed, so they said, "Oh, hell no. F*ck that. People need to work longer before they start collecting a pension.)

Of those three, the first, which is also the most important (impactful), is the one that makes the most sense to modify because it can be domestically controlled/motivated without needing the willing participation of external parties, and because:

• It doesn't impinge upon actual goods production (as would producing crap to lower ROW demand would) and enterprise profits and brand equity, and
• It doesn't piss off citizens who like the labor reforms.

Let's face it. The government saying to its people, "Hey, y'all. Things are good, but they'll become bad if you don't go out and spend some of those savings. Go buy stuff....whatever you want, just don't save so damn much," isn't a terribly difficult message to deliver. LOL

 

[expat_panama]

...Germany's situation, there were three primary factors causing their trade surplus: increases to the German saving rate...

That didn't happen.

A nations's savings rate has no affect on the trade deficit (the other two hdon't either but we can look at those later). It's easy enough to explain, and the first step is understanding just what a trade deficit is: how much the dollar value of a nation's goods'n'services exceed exports of same. German savings has nothing to do w/ this becuase Germans do not sell their exports of goods'n'services to foreigners for payments by foreigners in foreign cash. Germans get paid w/ foreign financial and capital assets.

While Germany had a trade surplus of two hundred + $B they also had an equal captital account deficit. Germans can save all the money they want but as long as they swap goods'n'services for stuff like foreign real estate there will be a trade surplus.