Trade deficits are ALWAYS detrimental to their nations’ GDPs.

[EdwardBaiamonte]

Trade surpluses ALWAYS contribute and trade deficits are ALWAYS detrimental to their nations’ GDPs.

How can a trade deficit be detrimental to GDP. If we buy more and more from China it merely means they have more and more dollars to spend here. Total dollars spent here stay the same and then so does GDP so no trade deficit is possible in reality.

 

[DSGE]

Trade surpluses ALWAYS contribute and trade deficits are ALWAYS detrimental to their nations’ GDPs.

How can a trade deficit be detrimental to GDP. If we buy more and more from China it merely means they have more and more dollars to spend here. Total dollars spent here stay the same and then so does GDP so no trade deficit is possible in reality.

That's... strangely correct. Nice work, Edward. But I will nitpick. A trade deficit is possible, since the balance of trade is goods and services imported/exported and doesn't include capital flows. A balance of payments deficit is not possible.

 

[EdwardBaiamonte]

Trade surpluses ALWAYS contribute and trade deficits are ALWAYS detrimental to their nations’ GDPs.

How can a trade deficit be detrimental to GDP. If we buy more and more from China it merely means they have more and more dollars to spend here. Total dollars spent here stay the same and then so does GDP so no trade deficit is possible in reality.

That's... strangely correct. Nice work, Edward. But I will nitpick. A trade deficit is possible, since the balance of trade is goods and services imported/exported and doesn't include capital flows. A balance of payments deficit is not possible.

yes the capital account is key especially now with Bernanke and Greenspan both saying the financial crisis was caused by huge capital inflows. This is why they claim they could not have controlled long term rates to dampen the crisis even if they had wanted to. This also explains,, to them anyway, why the trade deficit was not wholly due to a lack of competitiveness, but rather to a global savings glut.

I don't buy it but its a decent defense.

 

[Supposn]

How can a trade deficit be detrimental to GDP. If we buy more and more from China it merely means they have more and more dollars to spend here. Total dollars spent here stay the same and then so does GDP so no trade deficit is possible in reality.[/QUOTE]

Edward Baiamonte, when speaking and writing precisely, economist differentiate `between the words “investment” and “transfers of wealth”. Investment is the purchase or dedication of goods or service products for the eventual purpose of producing additional products of greater value.

The purchasing initial public offering, (IPO) stocks is investing; the stock issuing enterprise receives some additional capital due to the purchase. Other stock sales transactions provide no additional capital to the stock issuing enterprises.

Other than the brokerage fees which are a service product that enables liquidating the seller’s stock holdings, the price of other stock sales transactions are transfers of wealth rather than investments or products.

Transfers of wealth, (the vast proportion of stock and bond sales, deposits and contributions to bank and other financial accounts are not factored into GDPs; investments are factored into GDPs.

The vast proportions of revenues directly derived from importing products into the USA are used for transfers of wealth rather than for investments and as such contributes nothing to the GDP.

Whenever such revenues are used to purchase USA products for export, then USA’s global trade balance would be increased and our trade deficit would be reduced.

If such purchased USA products were invested within the USA, (i.e. Toyota built Toyota N. American factories), admittingly global trades’ additional contributions to our GDP is unidentified (within the GDP) and thus not attributed to USA’s global trade. Unfortunately this does not occur often enough.

Other than such particular circumstances, trade deficits are detrimental to their nations’ GDPs; (and there are many circumstances of nation’s global net trade balances’ understatements).

Respectfully, Supposn

 

[EdwardBaiamonte]

trade deficits are detrimental to their nations’ GDPs;

how can you have a trade deficit when our dollars that go to China must be spent in the USA???

 

[Supposn]

trade deficits are detrimental to their nations’ GDPs;

how can you have a trade deficit when our dollars that go to China must be spent in the USA???

Transfers of wealth do not contribute to GDPs.

Edward Baiamonte, Other than purchases of initial public offerings, the purchase of stocks and bonds do not cause the production of any goods or service products. Transfers of
wealth do not contribute anything to nations’ GDPs.

Refer to the topic “Global trade’s affects upon GDP”.

Respectfully, Supposn

 

[DSGE]

trade deficits are detrimental to their nations’ GDPs;

how can you have a trade deficit when our dollars that go to China must be spent in the USA???

Transfers of wealth do not contribute to GDPs.

Edward Baiamonte, Other than purchases of initial public offerings, the purchase of stocks and bonds do not cause the production of any goods or service products. Transfers of
wealth do not contribute anything to nations’ GDPs.

Refer to the topic “Global trade’s affects upon GDP”.

Respectfully, Supposn

When China uses its supply of US dollars to buy financial assets from the US, yes the purchase of those assets doesn't count towards GDP (nor does the sale). However, what occurs is a transfer of US dollars from China to the US; from whoever bought the asset in China, to whoever sold the asset in the US. The dollars end up back in the US, where they are then used for consumption/investment which does count towards GDP.

 

[Toddsterpatriot]

how can you have a trade deficit when our dollars that go to China must be spent in the USA???

Transfers of wealth do not contribute to GDPs.

Edward Baiamonte, Other than purchases of initial public offerings, the purchase of stocks and bonds do not cause the production of any goods or service products. Transfers of
wealth do not contribute anything to nations’ GDPs.

Refer to the topic “Global trade’s affects upon GDP”.

Respectfully, Supposn

When China uses its supply of US dollars to buy financial assets from the US, yes the purchase of those assets doesn't count towards GDP (nor does the sale). However, what occurs is a transfer of US dollars from China to the US; from whoever bought the asset in China, to whoever sold the asset in the US. The dollars end up back in the US, where they are then used for consumption/investment which does count towards GDP.

He already admitted his error when he showed my coffee imports didn't reduce GDP.

 

[DSGE]

Transfers of wealth do not contribute to GDPs.

Edward Baiamonte, Other than purchases of initial public offerings, the purchase of stocks and bonds do not cause the production of any goods or service products. Transfers of
wealth do not contribute anything to nations’ GDPs.

Refer to the topic “Global trade’s affects upon GDP”.

Respectfully, Supposn

When China uses its supply of US dollars to buy financial assets from the US, yes the purchase of those assets doesn't count towards GDP (nor does the sale). However, what occurs is a transfer of US dollars from China to the US; from whoever bought the asset in China, to whoever sold the asset in the US. The dollars end up back in the US, where they are then used for consumption/investment which does count towards GDP.

He already admitted his error when he showed my coffee imports didn't reduce GDP.

Yep. Told you it wouldn't be the end of it.

 

[EdwardBaiamonte]

Yep. Told you it wouldn't be the end of it.

are trade deficits always bad? Without trade we'd have to make everything ourself and so be very very poor. Trade makes us very very rich even if there is a deficit.

I think supposin's problem is he doesn't understand the difference between a trade deficit and a competitiveness deficit.

 

[Supposn]

where they are then used for consumption/investment which does count towards GDP[/I].

DSGE, the GDP doesn’t account for currency, it only accounts for goods and service products produced. It doesn’t account for the sale, trade or otherwise transfer of “paper” except when that paper represents the final sale of products.

When the accountings of U.S. dollars earned by foreigners pass through foreign banks, they are acknowledged to belong to foreign entities. If those dollars are later used to purchase U.S. products, THEY REDUCE USA’s TRADE DEFICIT.

It works in the same manner if the foreigners funds were derived from purely foreign transactions or if the funds were directly or indirectly derived from their trade with the USA entities.

I do not know what proportion of U.S. dollars earned by foreigners only pass through USA banks with no foreign connections before going on to later fund purchases of U.S. products. But I do not believe it’s a great proportion of global trade’s contributions to U.S. GDP that is not actually attributed to global trade.

The short answer to the question as to transfers of wealth directly or indirectly derived from foreign entities funding contributions to USA’s GDP but not being attributed to global trade is NO, that very seldom occurs.

Respectfully, Supposn

 

[EdwardBaiamonte]

is supposin against free trade?

what would he do about trade deficits like the one with China?

 

[Supposn]

is supposin against free trade?
what would he do about trade deficits like the one with China?

Edward Baiamonte, the Import Certificate, (IC) proposal’s only concern is the U.S. economy relative to the entire globe. The short answer to your question is this proposal does not favor or in any manner discriminate between any foreign nations.

The IC proposal is pure free enterprise and no entity, (not even the federal government) is granted any discretion of policy. The proposal only prevent our assessed imports from exceeding the value of our exports. All economic benefits flow from significantly decreasing USA’s trade deficit of goods.

It accomplishes that task by mandating surrender of ICs of sufficient face value to cover the imports’ assessed values; that mandate is the only non-voluntary act within this proposal.

the values of specifically listed minerals integral to goods are excluded from the goods assessed values.
U.S. purchasers of foreign goods eventually pay this proposal’s entire expenses.

Respectfully, Supposn

 

[EdwardBaiamonte]

is supposin against free trade?
what would he do about trade deficits like the one with China?

Edward Baiamonte, the Import Certificate, (IC) proposal’s only concern is the U.S. economy relative to the entire globe. The short answer to your question is this proposal does not favor or in any manner discriminate between any foreign nations.

The IC proposal is pure free enterprise and no entity, (not even the federal government) is granted any discretion of policy. The proposal only prevent our assessed imports from exceeding the value of our exports. All economic benefits flow from significantly decreasing USA’s trade deficit of goods.

It accomplishes that task by mandating surrender of ICs of sufficient face value to cover the imports’ assessed values; that mandate is the only non-voluntary act within this proposal.

the values of specifically listed minerals integral to goods are excluded from the goods assessed values.
U.S. purchasers of foreign goods eventually pay this proposal’s entire expenses.

Respectfully, Supposn

why are you afraid to answer the questions??

 

[Supposn]

is supposin against free trade?
what would he do about trade deficits like the one with China?

Edward Baiamonte, the Import Certificate, (IC) proposal’s only concern is the U.S. economy relative to the entire globe. The short answer to your question is this proposal does not favor or in any manner discriminate between any foreign nations.

The IC proposal is pure free enterprise and no entity, (not even the federal government) is granted any discretion of policy. The proposal only prevent our assessed imports from exceeding the value of our exports. All economic benefits flow from significantly decreasing USA’s trade deficit of goods.

It accomplishes that task by mandating surrender of ICs of sufficient face value to cover the imports’ assessed values; that mandate is the only non-voluntary act within this proposal.

the values of specifically listed minerals integral to goods are excluded from the goods assessed values.
U.S. purchasers of foreign goods eventually pay this proposal’s entire expenses.

Respectfully, Supposn

why are you afraid to answer the questions??

Edward Baiamonte, I’ve explained the Import Certificate proposal within this and many other messages.

The proposal doesn’t differentiate between foreign nations. What is it about the explanations that you do not understand?

Respectfully, Supposn

 

[EdwardBaiamonte]

Edward Baiamonte, I’ve explained the Import Certificate proposal within this and many other messages.

The proposal doesn’t differentiate between foreign nations. What is it about the explanations that you do not understand?

Respectfully, Supposn

Why do you want a Hawley Smoot Depression inducing trade war? Why do you want Americans to pay more and be poorer?
Why do you want Americans to have less money to spent and thus cause further unemployment here?
Why do you endorse the concept of Connecticut starting a trade war with Mississippi?


You are a liberal and so very very slow. Sorry

 

[Supposn]

.......................... Why do you want a Hawley Smoot Depression inducing trade war? Why do you want Americans to pay more and be poorer?
Why do you want Americans to have less money to spent and thus cause further unemployment here? ...............................

Edward Baiamonte, those who aspire to import and those who import USA goods into many foreign nations are often less welcomed than importers and imports from other competing nations.

Rather than defending exporters of U.S. goods and their goods, our government too often acquiesces or surrenders. Additionally U.S. producers interests our compromised by federal negotiators that have a non-economic agenda.

I particularly recall Louisiana rice growers being shafted because the Department of defense wanted to keep our Okinawa military bases. This would not happen under an Import Certificate, (IC) policy because the policy grants no entity, (not even the federal government) any additional discretion within the issue of USA’s global trade. U.S. negotiators would have to find an accommodation (other than global trade) to sweeten the deal.

The Marshall plan wasn’t enacted at the expense of any particular U.S. industries or U.S. wage earning families; the Marshall plan was funded by USA’s aggregate federal budget.
The IC policy is eventually and entirely funded by U.S. purchasers of foreign goods. It would not cause a global trade war but if that’s what it takes to defend USA’s economy and our wage earning families,
we shouldn’t betray our own best economic interests.
 
Respectfully, Supposn

 

[EdwardBaiamonte]

.......................... Why do you want a Hawley Smoot Depression inducing trade war? Why do you want Americans to pay more and be poorer?
Why do you want Americans to have less money to spent and thus cause further unemployment here? ...............................

Edward Baiamonte, those who aspire to import and those who import USA goods into many foreign nations are often less welcomed than importers and imports from other competing nations.

Rather than defending exporters of U.S. goods and their goods, our government too often acquiesces or surrenders. Additionally U.S. producers interests our compromised by federal negotiators that have a non-economic agenda.

I particularly recall Louisiana rice growers being shafted because the Department of defense wanted to keep our Okinawa military bases. This would not happen under an Import Certificate, (IC) policy because the policy grants no entity, (not even the federal government) any additional discretion within the issue of USA’s global trade. U.S. negotiators would have to find an accommodation (other than global trade) to sweeten the deal.

The Marshall plan wasn’t enacted at the expense of any particular U.S. industries or U.S. wage earning families; the Marshall plan was funded by USA’s aggregate federal budget.
The IC policy is eventually and entirely funded by U.S. purchasers of foreign goods. It would not cause a global trade war but if that’s what it takes to defend USA’s economy and our wage earning families,
we shouldn’t betray our own best economic interests.
 
Respectfully, Supposn

you ignored all my questions?? doesn't that mean you are afraid to learn??

 

[Supposn]

.......................... Why do you want a Hawley Smoot Depression inducing trade war? Why do you want Americans to pay more and be poorer?
Why do you want Americans to have less money to spent and thus cause further unemployment here? ...............................

Edward Baiamonte, ......................................................................................................................................................................The Marshall plan wasn’t enacted at the expense of any particular U.S. industries or U.S. wage earning families; the Marshall plan was funded by USA’s aggregate federal budget.
The IC policy is eventually and entirely funded by U.S. purchasers of foreign goods. It would not cause a global trade war but if that’s what it takes to defend USA’s economy and our wage earning families,
we shouldn’t betray our own best economic interests.
 
Respectfully, Supposn

Edward Baiamonte, you write but do not read?
I did not ignore your questions. Within message #97 I wrote 203 words to answer your questions and explain the reasoning that led to that answer.

Note the last paragraph of message #97.

Respectfully, Supposn

 

[Supposn]

Trade surpluses ALWAYS contribute and trade deficits are ALWAYS detrimental to their nations’ GDPs.

How can a trade deficit be detrimental to GDP. If we buy more and more from China it merely means they have more and more dollars to spend here. Total dollars spent here stay the same and then so does GDP so no trade deficit is possible in reality.

Edward Baiamonte, Trade deficits cannot contribute anything to their nation’s GDP,

The only alternative to purchasing imported products are expenditures for transfers of wealth or for domestic products.

If we reduced foreign products expenditures and didn’t spend an additional cent for domestic products, there would be no change in the nation’s GDP.

Otherwise, the GDP would be increased by the additional expenditures for domestic products.

Am I to suppose you believe if we limit our global imports to the adjusted assessed value of our exports, there wouldn’t be increased purchases of U.S. products?


Respectfully, Supposn