Supply-Side Economics

[whell]

Originally Posted by finnbow

You, like your idiotic Dear Leader, don't know the difference between a trade deficit and a budget deficit. Every post you make on matters economic should how little you truly understand it.

You're full of shit, Finn. I posted about a trade deficit, which can have exactly the corrosive effects that I discussed. I'm not sure how you found a reference to a budget deficit with my comments about a loss of skills necessary to make some products???

I think we're back to wondering about your ability to comprehend what is posted.

[finnbow]

Originally Posted by whell

You're full of shit, Finn. I posted about a trade deficit, which can have exactly the corrosive effects that I discussed. I'm not sure how you found a reference to a budget deficit with my comments about a loss of skills necessary to make some products???

I think we're back to wondering about your ability to comprehend what is posted.

You posted "What we do have is increased debt when an economy imports more than it exports" as if there is a clear and demonstrable relationship between the budget deficits and trade deficit. There isn't.

[whell]

Originally Posted by finnbow

You posted "What we do have is increased debt when an economy imports more than it exports" as if there is a clear and demonstrable relationship between the budget deficits and trade deficit. There isn't.

https://www.thebalance.com/u-s-trade...rtners-3306276

An ongoing trade deficit is detrimental to the nation’s economy because it is financed with debt. The United States can buy more than it makes because it borrows from its trading partners. It's like a party where the pizza place is willing to keep sending you pizzas and putting it on your tab. This can only continue as long as the pizzeria trusts you to repay the loan. One day, the lending countries could decide to ask America to repay the debt. On that day, the party is over.

A second concern about the trade deficit is the statement it makes about the competitiveness of the U.S. economy itself. By purchasing goods overseas for a long enough period of time, U.S. companies lose the expertise and even the factories to make those products.

Note the difference between a discussion of the "budget deficit" and the national debt. We're taking here about the increasing debt of the US Gov't. Now, you could argue that no one today credibly questions the ability of the US to pay its debts. But what about 10 years from now, or 20, or 30. There's no current plan to reduce the size of the US debt, including the current occupant of the Oval Office. To the extent that reducing the trade imbalance reduces the expansion of current debt, that's a good thing. But as the article above points out, the party can't go on forever. There are current examples of exactly that scenario.