Trade deficits are ALWAYS detrimental to their nations’ GDPs.

[DSGE]

Okay so first off, I don't see how this:

The expenditure method is among the simplest and most common method for calculating gross domestic product, (i.e. GDP). Nations’ entire final expenditures for goods and service products are included within their GDP.

The total value of the nation’s imports are subtracted from the importing nations’ and added to the producing nations’ GDPs.

The prices of many specific products do not reflect the entire costs of goods and services that supported the production of those specific products. For example there’s research and development costs that were provided at lesser cost by universities or other non-profit entities or infrastructure contributed by local governments as an inducement to relocate facilities. All of those production supporting goods and services are included within the producing nations’ GDPs; but they cannot be statistically identified and attributed to foreign trade.

The production of globally traded products may sometimes directly or indirectly support or induce additional production of non-globally traded products. These are additional instances of goods and services that contributed to the producing nations’ GDPs but could not be statistically identified and attributed to foreign trade.

...logically follows into this:

Nation’s net global balance of trade affects upon their GDPs are sometimes understated but they’re not overstated. Trade surpluses ALWAYs contribute and trade deficits are ALWAYS detrimental to their nation’s GDPs.

Maybe you can shed some light onto that. But I'll clear up some stuff first:

The total value of the nation’s imports are subtracted from the importing nations’ and added to the producing nations’ GDPs.

Okay so you're making an accounting mistake here. imports are subtracted from GDP, therefore more imports means less GDP. Right? No. GDP is C + I + G + X - M. The reason we subtract imports, "- M", is to avoid double counting. See C, I and G all include in them both things produced domestically and things imported internationally and consumed, invested. GDP measures total domestic production. But if we measure C, I and G, we end up with all the goods produced domestically produced for consumption, investment, etc, but we also get the goods produced internationally that are being consumed invested. So we " - M", subtract imports, so that we get rid of counting foreign goods as being produced domestically. Imports do not lower GDP at all.

The prices of many specific products do not reflect the entire costs of goods and services that supported the production of those specific products. For example there’s research and development costs that were provided at lesser cost by universities or other non-profit entities or infrastructure contributed by local governments as an inducement to relocate facilities. All of those production supporting goods and services are included within the producing nations’ GDPs; but they cannot be statistically identified and attributed to foreign trade.

I'm not sure what this is even trying to say. Maybe an example would help?

The production of globally traded products may sometimes directly or indirectly support or induce additional production of non-globally traded products.

Such as?

 

[Supposn]

Okay so first off, I don't see how this:

Maybe you can shed some light onto that. But I'll clear up some stuff first:

Okay so you're making an accounting mistake here. imports are subtracted from GDP, therefore more imports means less GDP. Right? No. GDP is C + I + G + X - M. The reason we subtract imports, "- M", is to avoid double counting. See C, I and G all include in them both things produced domestically and things imported internationally and consumed, invested. GDP measures total domestic production. But if we measure C, I and G, we end up with all the goods produced domestically produced for consumption, investment, etc, but we also get the goods produced internationally that are being consumed invested. So we " - M", subtract imports, so that we get rid of counting foreign goods as being produced domestically. Imports do not lower GDP at all.

DSGE,
(X – M) = (exports – imports) = balance of foreign trade.

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

GDP is a report of what actually occurred within the specified time.

If E and X were the same but M were less, GDP would have been greater.
If E and X were the same but M were greater, GDP would have been less.

M representing imports are detrimental to the value of GDP. M is subtracted from the importing nations’ GDP because they paid M for goods produced beyond their national borders.

If you object to my narration of this math, you can use yours rather than my rationalization but bottom line, there’s an inverse relationship between M and GDP.

Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Respectfully, Supposn

 

[DSGE]

DSGE,
(X – M) = (exports – imports) = balance of foreign trade.

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

GDP is a report of what actually occurred within the specified time.

If E and X were the same but M were less, GDP would have been greater.
If E and X were the same but M were greater, GDP would have been less.

M representing imports are detrimental to the value of GDP. M is subtracted from the importing nations’ GDP because they paid M for goods produced beyond their national borders.

If you object to my narration of this math, you can use yours rather than my rationalization but bottom line, there’s an inverse relationship between M and GDP.

Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Respectfully, Supposn

Did you actually read my post? Am I wasting my time? Tell me right now if I'm wasting my time. If you've got a foregone conclusion and won't actually listen to any reason, I want to be made aware now so that I can stop.

I addressed exactly the error you made there in my post. I'll address it one more time, and if you don't at least attempt to understand it I'm gonna stop talking to you.

GDP measures things produced domestically. We get all the stuff produced domestically by adding up the components (WLOG, I'm omitting government for simplicity): things produced domestically for consumption, things produced domestically for investment, things produced domestically for export. GDP = C(domestic) + I(domestic) + X.

So what happens when we go out to measure GDP. We measure total consumption, total investment and total exports. If we add them together do we get GDP? NO! When we measure total consumption, we're not just measuring the consumption of things produced domestically. Total consumption also includes consumption of things produced internationally which we've imported. Same for investment. So if we go and add up C(total) + I(total) + X, we don't get GDP. What we get is GDP plus a bunch of stuff that was produced internationally. How do we deal with that? We only want to get to stuff produced domestically. Well the way we do that, is we subtract stuff produced internationally that we consume/invest. That is, minus imports. So when we subtract imports, C(total) + I(total) + X - M is equal to GDP + some international goods - some international goods = just GDP.

The " - M" part of the equation doesn't mean that imports lower GDP. The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically. Imports do not lower GDP!!!!!!!!

 

[Supposn]

DSGE,
(X – M) = (exports – imports) = balance of foreign trade.

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

GDP is a report of what actually occurred within the specified time.

If E and X were the same but M were less, GDP would have been greater.
If E and X were the same but M were greater, GDP would have been less.

M representing imports are detrimental to the value of GDP. M is subtracted from the importing nations’ GDP because they paid M for goods produced beyond their national borders.

If you object to my narration of this math, you can use yours rather than my rationalization but bottom line, there’s an inverse relationship between M and GDP.

Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Respectfully, Supposn

Did you actually read my post? Am I wasting my time? Tell me right now if I'm wasting my time. If you've got a foregone conclusion and won't actually listen to any reason, I want to be made aware now so that I can stop.

I addressed exactly the error you made there in my post. I'll address it one more time, and if you don't at least attempt to understand it I'm gonna stop talking to you.The " - M" part of the equation doesn't mean that imports lower GDP. The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically. Imports do not lower GDP!!!!!!!!

DSGE, yes I actually read your post. You’re incorrect.
Regardless of your opinion, the fact, (not an opinion) is the negative sign before “M” means that there’s an inverse relationship between the GDP and “M”.
Respectfully, Supposn

 

[Toddsterpatriot]

DSGE,
(X – M) = (exports – imports) = balance of foreign trade.

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

GDP is a report of what actually occurred within the specified time.

If E and X were the same but M were less, GDP would have been greater.
If E and X were the same but M were greater, GDP would have been less.

M representing imports are detrimental to the value of GDP. M is subtracted from the importing nations’ GDP because they paid M for goods produced beyond their national borders.

If you object to my narration of this math, you can use yours rather than my rationalization but bottom line, there’s an inverse relationship between M and GDP.

Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Respectfully, Supposn

Did you actually read my post? Am I wasting my time? Tell me right now if I'm wasting my time. If you've got a foregone conclusion and won't actually listen to any reason, I want to be made aware now so that I can stop.

I addressed exactly the error you made there in my post. I'll address it one more time, and if you don't at least attempt to understand it I'm gonna stop talking to you.The " - M" part of the equation doesn't mean that imports lower GDP. The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically. Imports do not lower GDP!!!!!!!!

DSGE, yes I actually read your post. You’re incorrect.
Regardless of your opinion, the fact, (not an opinion) is the negative sign before “M” means that there’s an inverse relationship between the GDP and “M”.
Respectfully, Supposn

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

So let's say we calculate these numbers and come up with a GDP of $15 trillion.
Let's calculate them again with a single change, I bought $1 billion worth of coffee from Panama. I paid for my purchase with money from my checking account.
What is the new GDP calculation?

 

[DSGE]

DSGE,
(X – M) = (exports – imports) = balance of foreign trade.

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

GDP is a report of what actually occurred within the specified time.

If E and X were the same but M were less, GDP would have been greater.
If E and X were the same but M were greater, GDP would have been less.

M representing imports are detrimental to the value of GDP. M is subtracted from the importing nations’ GDP because they paid M for goods produced beyond their national borders.

If you object to my narration of this math, you can use yours rather than my rationalization but bottom line, there’s an inverse relationship between M and GDP.

Trade deficits are ALWAYS detrimental to their nations’ GDPs.

Respectfully, Supposn

Did you actually read my post? Am I wasting my time? Tell me right now if I'm wasting my time. If you've got a foregone conclusion and won't actually listen to any reason, I want to be made aware now so that I can stop.

I addressed exactly the error you made there in my post. I'll address it one more time, and if you don't at least attempt to understand it I'm gonna stop talking to you.The " - M" part of the equation doesn't mean that imports lower GDP. The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically. Imports do not lower GDP!!!!!!!!

DSGE, yes I actually read your post. You’re incorrect.
Regardless of your opinion, the fact, (not an opinion) is the negative sign before “M” means that there’s an inverse relationship between the GDP and “M”.
Respectfully, Supposn

Then find the part of the explanation you think is incorrect. It's not enough to say "no, you're wrong". You've got to find the point in the explanation where the error was made.

And claiming that something is a fact doesn't make it a fact. You've got to actually show how it's a fact. Which so far you've completely failed to do.

So far I've gathered that you're not interested in any actual dialogue. You make claims which you can't support, and when you're shown where you've made a mistake you just go "no, you're incorrect" with no further qualification. Pull your god damn head out of your arse.

 

[Supposn]

Let (X - M) = (exports - imports) = nation's global trade balance

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

So let's say we calculate these numbers and come up with a GDP of $15 trillion.
Let's calculate them again with a single change, I bought $1 billion worth of coffee from Panama. I paid for my purchase with money from my checking account.
What is the new GDP calculation?

ToddsterPatriot, purchases of stocks and bonds, bank deposits or financial funds are NOT “investments” as that word is precisely used by economists.

Those disbursements are considered by economists as “transfers of wealth” and they are not included within GDPs.

In your adjustment of the GDP report, you’ve changed 2 rather than 1 term.
You’ve removed a billion dollars from your checking account which previously was not included within the GDP calculation and added it to total investments when you purchased Panama coffee with those billion dollars.

Those two changes, (i.e. the increases to “I” and to “M”) cancelled each other out and your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

Respectfully, Supposn

 

[Supposn]

DSGE, you correctly wrote “The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically”.

(Nation’s total expenditures for goods and services) = E
(Nation’s net global trade) = (exports – imports) = (X – M)
E was spent for goods and services.
E + (X – M) = GDP is a report of what has occurred.

If M was in error and E was correct, you would only adjust M to keep the GDP formula balanced.

Otherwise if you adjusted M and the formulas was out of balance, that would indicate that X or E or both X & E also required adjustment.

Refer to the previous message #67.

Respectfully, Supposn

 

[DSGE]

DSGE, you correctly wrote “The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically”.

(Nation’s total expenditures for goods and services) = E
(Nation’s net global trade) = (exports – imports) = (X – M)
E was spent for goods and services.
E + (X – M) = GDP is a report of what has occurred.

If M was in error and E was correct, you would only adjust M to keep the GDP formula balanced.

Otherwise if you adjusted M and the formulas was out of balance, that would indicate that X or E or both X & E also required adjustment.

Refer to the previous message #67.

Respectfully, Supposn

"If M was in error and E was correct"?

What's all that about.

It's pretty simple. If imports increase, E increases. Those goods and services are consumed/invested/bought by the government. If imports increase by M, E also increases by M.

Say we start with E expenditures, X exports and M imports.

GDP = E + X - M

Say there's a one unit increase in imports. Those imports are consumed or invested and such.

GDP = (E + 1) + X - (M+1)

Expand:

GDP = E + 1 + X - M - 1
GDP = E + X - M + 1 -1
GDP = E + X - M + 0
GDP = E + X - M

exactly the same as before. We increased imports by one unit, and GDP remains exactly the same.

 

[editec]

...

...Canadians gave me that thousand dollars worth of Apple stock (about 120 shares) because I gave them the 4k board feet of lumber I'd grown that year...

...this is a push, no trade gap, you sent them $1k worth of stuff they sent you $1k worth of stuff...

That's why all this 'trade gap' dribble is nonsense. All foreign trade balances becuase we sell stuff and they sell an amount of stuff that's always equal to what we sold. Saying that some how my swapping stocks for lumber is a trade gap is crazy!

Say what?

 

[Supposn]

DSGE, you correctly wrote “The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically”.

(Nation’s total expenditures for goods and services) = E
(Nation’s net global trade) = (exports – imports) = (X – M)
E was spent for goods and services.
E + (X – M) = GDP is a report of what has occurred.

If M was in error and E was correct, you would only adjust M to keep the GDP formula balanced.

Otherwise if you adjusted M and the formulas was out of balance, that would indicate that X or E or both X & E also required adjustment.

Refer to the previous message #67.

Respectfully, Supposn

"If M was in error and E was correct"?

What's all that about.

It's pretty simple. If imports increase, E increases. Those goods and services are consumed/invested/bought by the government. If imports increase by M, E also increases by M.

Say we start with E expenditures, X exports and M imports.

GDP = E + X - M

Say there's a one unit increase in imports. Those imports are consumed or invested and such.

GDP = (E + 1) + X - (M+1)

Expand:

GDP = E + 1 + X - M - 1
GDP = E + X - M + 1 -1
GDP = E + X - M + 0
GDP = E + X - M

exactly the same as before. We increased imports by one unit, and GDP remains exactly the same.

DSGE, yes, “exactly the same as before. We increased imports by one unit, and GDP remains exactly the same”.
GDP hasn’t changed but you had to bring an additional unit to the table.

We do not have an unlimited number of dollars to spend. The Feds can’t simply print more and expect the U.S. dollar to retain its purchasing power.

The GDP is a statistical report of what has occurred during the reporting period.
You wrote “Say there's a one unit increase in imports. Those imports are consumed or invested and such”.

Why are you increasing imports by one unit? That’s actually germane to this explanation. You logically wouldn’t be modifying the reported GDP statistics unless something is in error.

That’s what "If M was in error and E was correct" is all about.

If only M was in error, than you would change only M.
If you changed M and the report is not in balance, then you have to make other modifications or your modification of M was incorrect.

The minus sign before M indicates that E and M are inversely related. Unless you bring money to the table, you cannot increase M.

Respectfully, Supposn

 

[DSGE]

DSGE, you correctly wrote “The " - M" is there to prevent counting things from consumption and investment which weren't produced domestically”.

(Nation’s total expenditures for goods and services) = E
(Nation’s net global trade) = (exports – imports) = (X – M)
E was spent for goods and services.
E + (X – M) = GDP is a report of what has occurred.

If M was in error and E was correct, you would only adjust M to keep the GDP formula balanced.

Otherwise if you adjusted M and the formulas was out of balance, that would indicate that X or E or both X & E also required adjustment.

Refer to the previous message #67.

Respectfully, Supposn

"If M was in error and E was correct"?

What's all that about.

It's pretty simple. If imports increase, E increases. Those goods and services are consumed/invested/bought by the government. If imports increase by M, E also increases by M.

Say we start with E expenditures, X exports and M imports.

GDP = E + X - M

Say there's a one unit increase in imports. Those imports are consumed or invested and such.

GDP = (E + 1) + X - (M+1)

Expand:

GDP = E + 1 + X - M - 1
GDP = E + X - M + 1 -1
GDP = E + X - M + 0
GDP = E + X - M

exactly the same as before. We increased imports by one unit, and GDP remains exactly the same.

DSGE, yes, “exactly the same as before. We increased imports by one unit, and GDP remains exactly the same”.
GDP hasn’t changed but you had to bring an additional unit to the table.

We do not have an unlimited number of dollars to spend. The Feds can’t simply print more and expect the U.S. dollar to retain its purchasing power.

The GDP is a statistical report of what has occurred during the reporting period.
You wrote “Say there's a one unit increase in imports. Those imports are consumed or invested and such”.

Why are you increasing imports by one unit? That’s actually germane to this explanation. You logically wouldn’t be modifying the reported GDP statistics unless something is in error.

That’s what "If M was in error and E was correct" is all about.

If only M was in error, than you would change only M.
If you changed M and the report is not in balance, then you have to make other modifications or your modification of M was incorrect.

The minus sign before M indicates that E and M are inversely related. Unless you bring money to the table, you cannot increase M.

Respectfully, Supposn

Money is being brought to the table. Trade deficits are financed through capital and financial account surpluses. You must borrow internationally to finance a trade deficit. So the "increase M by one unit" isn't because of a error; we're borrowing internationally to finance consumption/investment of foreign goods.

 

[Supposn]

.Say we start with E expenditures, X exports and M imports.

GDP = E + X - M

Say there's a one unit increase in imports. Those imports are consumed or invested and such.

GDP = (E + 1) + X - (M+1)

Expand:

GDP = E + X - M + 0
GDP = E + X - M

exactly the same as before. We increased imports by one unit, and GDP remains exactly the same.

DSGE, yes, “exactly the same as before. We increased imports by one unit, and GDP remains exactly the same”.
GDP hasn’t changed but you had to bring an additional unit to the table.

We do not have an unlimited number of dollars to spend. The Feds can’t simply print more and expect the U.S. dollar to retain its purchasing power.

The GDP is a statistical report of what has occurred during the reporting period.
You wrote “Say there's a one unit increase in imports. Those imports are consumed or invested and such”.

Why are you increasing imports by one unit? That’s actually germane to this explanation. You logically wouldn’t be modifying the reported GDP statistics unless something is in error.

That’s what "If M was in error and E was correct" is all about.

If only M was in error, than you would change only M.
If you changed M and the report is not in balance, then you have to make other modifications or your modification of M was incorrect.

The minus sign before M indicates that E and M are inversely related. Unless you bring money to the table, you cannot increase M.

Respectfully, Supposn

Money is being brought to the table. Trade deficits are financed through capital and financial account surpluses. You must borrow internationally to finance a trade deficit. So the "increase M by one unit" isn't because of a error; we're borrowing internationally to finance consumption/investment of foreign goods.

DSGE, there are no stocks, no bonds, no banks no financial funds, no capital account involved within GDP. GDP deals only with final sales transactions of goods and service products and the nations’ global net trade balances.

You want to create another statistical tool, knock yourself out. GDPs are what they are by definition. By that same definition and the accepted conventional formulas for calculating GDP, trade deficits are ALWAYS detrimental and surpluses ALWAYS contribute to their GDPs.

Respectfully, Supposn

 

[Toro]

Supposn

Where did you study economics? Who taught you this?

 

[DSGE]

DSGE, yes, “exactly the same as before. We increased imports by one unit, and GDP remains exactly the same”.
GDP hasn’t changed but you had to bring an additional unit to the table.

We do not have an unlimited number of dollars to spend. The Feds can’t simply print more and expect the U.S. dollar to retain its purchasing power.

The GDP is a statistical report of what has occurred during the reporting period.
You wrote “Say there's a one unit increase in imports. Those imports are consumed or invested and such”.

Why are you increasing imports by one unit? That’s actually germane to this explanation. You logically wouldn’t be modifying the reported GDP statistics unless something is in error.

That’s what "If M was in error and E was correct" is all about.

If only M was in error, than you would change only M.
If you changed M and the report is not in balance, then you have to make other modifications or your modification of M was incorrect.

The minus sign before M indicates that E and M are inversely related. Unless you bring money to the table, you cannot increase M.

Respectfully, Supposn

Money is being brought to the table. Trade deficits are financed through capital and financial account surpluses. You must borrow internationally to finance a trade deficit. So the "increase M by one unit" isn't because of a error; we're borrowing internationally to finance consumption/investment of foreign goods.

DSGE, there are no stocks, no bonds, no banks no financial funds, no capital account involved within GDP. GDP deals only with final sales transactions of goods and service products and the nations’ global net trade balances.

What are you talking about? How is that related to what I said. The way you can "increase M by one unit" is by borrowing internationally. And that's exactly how it's done. A trade deficit is funded by borrowing internationally, creating a capital account surplus. What part of that is unclear?

 

[Toddsterpatriot]

Let (X - M) = (exports - imports) = nation's global trade balance

Let E = [C + I + G] = total national expenditures for both domestic and imported goods and service products.

we agree that GDP = E + (X – M) ?

So let's say we calculate these numbers and come up with a GDP of $15 trillion.
Let's calculate them again with a single change, I bought $1 billion worth of coffee from Panama. I paid for my purchase with money from my checking account.
What is the new GDP calculation?

ToddsterPatriot, purchases of stocks and bonds, bank deposits or financial funds are NOT “investments” as that word is precisely used by economists.

Those disbursements are considered by economists as “transfers of wealth” and they are not included within GDPs.

In your adjustment of the GDP report, you’ve changed 2 rather than 1 term.
You’ve removed a billion dollars from your checking account which previously was not included within the GDP calculation and added it to total investments when you purchased Panama coffee with those billion dollars.

Those two changes, (i.e. the increases to “I” and to “M”) cancelled each other out and your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

Respectfully, Supposn

your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

So the increase in the trade deficit did not hurt GDP. Excellent!

 

[DSGE]

So let's say we calculate these numbers and come up with a GDP of $15 trillion.
Let's calculate them again with a single change, I bought $1 billion worth of coffee from Panama. I paid for my purchase with money from my checking account.
What is the new GDP calculation?

ToddsterPatriot, purchases of stocks and bonds, bank deposits or financial funds are NOT “investments” as that word is precisely used by economists.

Those disbursements are considered by economists as “transfers of wealth” and they are not included within GDPs.

In your adjustment of the GDP report, you’ve changed 2 rather than 1 term.
You’ve removed a billion dollars from your checking account which previously was not included within the GDP calculation and added it to total investments when you purchased Panama coffee with those billion dollars.

Those two changes, (i.e. the increases to “I” and to “M”) cancelled each other out and your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

Respectfully, Supposn

your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

So the increase in the trade deficit did not hurt GDP. Excellent!

Something tells me that won't be the end of this...

 

[Toddsterpatriot]

ToddsterPatriot, purchases of stocks and bonds, bank deposits or financial funds are NOT “investments” as that word is precisely used by economists.

Those disbursements are considered by economists as “transfers of wealth” and they are not included within GDPs.

In your adjustment of the GDP report, you’ve changed 2 rather than 1 term.
You’ve removed a billion dollars from your checking account which previously was not included within the GDP calculation and added it to total investments when you purchased Panama coffee with those billion dollars.

Those two changes, (i.e. the increases to “I” and to “M”) cancelled each other out and your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

Respectfully, Supposn

your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

So the increase in the trade deficit did not hurt GDP. Excellent!

Something tells me that won't be the end of this...

He admitted he was wrong, what else can he do?

 

[Supposn]

So let's say we calculate these numbers and come up with a GDP of $15 trillion.
Let's calculate them again with a single change, I bought $1 billion worth of coffee from Panama. I paid for my purchase with money from my checking account.
What is the new GDP calculation?

ToddsterPatriot, purchases of stocks and bonds, bank deposits or financial funds are NOT “investments” as that word is precisely used by economists.

Those disbursements are considered by economists as “transfers of wealth” and they are not included within GDPs.

In your adjustment of the GDP report, you’ve changed 2 rather than 1 term.
You’ve removed a billion dollars from your checking account which previously was not included within the GDP calculation and added it to total investments when you purchased Panama coffee with those billion dollars.

Those two changes, (i.e. the increases to “I” and to “M”) cancelled each other out and your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

Respectfully, Supposn

your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

So the increase in the trade deficit did not hurt GDP. Excellent!

ToddsterPatriot, you brought an additional billion dollars to the table, purchased a billion dollars worth of imports and retained the same GDP.
It required a billion additional dollars to make up for the Loss of GDP due to the additional trade deficit.

If rather than purchasing imported products, domestic products had been purchased, the differences of the two scenarios GDPs was the same as the differences between their trade deficits, (i.e. a billion dollars).
Trade deficits are ALWAYS detrimental to their nation’s GDP.

Respectfully, Supposn

 

[Toddsterpatriot]

ToddsterPatriot, purchases of stocks and bonds, bank deposits or financial funds are NOT “investments” as that word is precisely used by economists.

Those disbursements are considered by economists as “transfers of wealth” and they are not included within GDPs.

In your adjustment of the GDP report, you’ve changed 2 rather than 1 term.
You’ve removed a billion dollars from your checking account which previously was not included within the GDP calculation and added it to total investments when you purchased Panama coffee with those billion dollars.

Those two changes, (i.e. the increases to “I” and to “M”) cancelled each other out and your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

Respectfully, Supposn

your GDP adjustment left the total GDP unchanged. It remains at exactly 15 trillion dollars.

So the increase in the trade deficit did not hurt GDP. Excellent!

ToddsterPatriot, you brought an additional billion dollars to the table, purchased a billion dollars worth of imports and retained the same GDP.
It required a billion additional dollars to make up for the Loss of GDP due to the additional trade deficit.

If rather than purchasing imported products, domestic products had been purchased, the differences of the two scenarios GDPs was the same as the differences between their trade deficits, (i.e. a billion dollars).
Trade deficits are ALWAYS detrimental to their nation’s GDP.

Respectfully, Supposn

I didn't bring additional dollars to the table, they were already in my bank account.
There was no loss of GDP, as your calculation showed.
There is no domestic Panamanian coffee. It was import or nothing.
Thanks for showing there was no "detriment" to US GDP.