The trade deficit won't matter a great deal as long as we are able to find suckers to finance us. But only till that day.....
Let me help you out, kiddo.
When you import raw materials, make something out of it, and then sell it to the rest of the world. The trade deficit shrinks b/c finished products are FAR more valuable than raw materials.
From an energy standpoint, that's the point of becoming more energy efficient . . . doing more with less.
As for your comment about being #1 or #2 exporter . . . who cares? If we were #3 and running a $760 BILLION surplus instead of deficit our country would be in much better shape than having the title of "#1."
trade stats
The point is that typical US citizens would benefit from our nation PRODUCING products and selling them to the rest of the world. Granted, there's very little doubt that a sliver of the US population benefits greatly from producing products using the cheapest possible labor and then shipping those finished products to the US.
Now that's not advocacy of protectionism or Buy American jingoism. It's just stating a case for an economy of jobs where people make stuff instead of an economy of jobs where people 'sell' stuff at WalMart. There's no free lunch so inflation would certainly have been more of an issue over the past decade but there's several million people in the South, Midwest, and Northeast that would have preferred paying that price to keep their manufacturing jobs. And I would wager many fellow Americans would concur.
ProfJohn
Lifer
- Jul 28, 2006
- 18,251
- 8
- 0
Very well done ayabe.
I also think a lot of people say that trade deficits don't do a good enough job accounting for "intellectual" properties.
For example, how much money does Hollywood make over seas, all the money comes back to Hollywood just like it would if GM was selling American made cars in Japan. The same with software products and consulting fees etc etc.
All the above are real income that the US takes in, but it is not measures via trade deficits because it is not an intrinsic item that you can apply a simple dollar value too.
(I read this many years ago, I doubt things have changed since then.)
You missed my point entirely. He stated we export "nothing". My response was a simple we are the #1 or #2 exporter of goods in the world which contradicts his statement kiddo.
As for your point, the simple fact is we are the biggest consumers of our own products. We import because it is cheaper to import than it is to produce, harvest, gather, or build what we import for the products we consume. If it wasnt, then we wouldnt be importing the resources or product.
That article is pretty good at dealing with the idea a surplus in this nation will equal even larger increases in economic growth. I would suggest reading it.
A lot of people here is using wrong or random data.... Just for your knowledge:
Share of World Exports, by Value:
Western Europe: 44.5%
USA/Canada: 17.0%
Asia (Ex. Japan): 15.9%
Japan: 7.4%
Latin America: 5.2%
Middle East: 2.6%
Africa: 2.0%
Oceania: 1.3%
(OECD, 2004)
Exports Growth, Average Annual Pecentage:
China: 15%
Western Europe: 6%
USA/Canada: 7.0%
Asia (Ex. China): 8.9%
Eastern Europe: 7.5%
Latin America: 8.2%
Africa: 1.0%
(OECD, 2004)
Imports Growth, Average Annual Pecentage:
China: 12%
Western Europe: 4%
USA/Canada: 9.0%
Asia (Ex. China): 5%
Eastern Europe: 8.5%
Latin America: 14.2%
Africa: 5.0%
(OECD, 2004)
Share of World Exports, by Value:
Western Europe: 44.5%
USA/Canada: 17.0%
Asia (Ex. Japan): 15.9%
Japan: 7.4%
Latin America: 5.2%
Middle East: 2.6%
Africa: 2.0%
Oceania: 1.3%
(OECD, 2004)
Exports Growth, Average Annual Pecentage:
China: 15%
Western Europe: 6%
USA/Canada: 7.0%
Asia (Ex. China): 8.9%
Eastern Europe: 7.5%
Latin America: 8.2%
Africa: 1.0%
(OECD, 2004)
Imports Growth, Average Annual Pecentage:
China: 12%
Western Europe: 4%
USA/Canada: 9.0%
Asia (Ex. China): 5%
Eastern Europe: 8.5%
Latin America: 14.2%
Africa: 5.0%
(OECD, 2004)
He also fails to realize that every year our proudction capacity expands. We continue to make more using less manpower. Manufacting jobs are being lost to automation much more so than offshoring. Historicaly we icnrease our energy effeciency 1.5% every year. We continue to do more with less.
Stunt
Diamond Member
- Jul 17, 2002
- 9,717
- 2
- 0
This is what more of you guys should be asking. It's astounding how little you guys know about economic indicators.
Trade deficit tends to have a negative ring to it as people draw similarities to budget deficits. Trade is a whole different animal in itself; a deficit here can be a good thing and a bad thing.
For example, Canada being a resource rich economy tends to make all of its money selling commodities to other countries; one of these being the US. The US in turn has many manufacturing, high tech and research companies (which Canada lacks for the most part) who make products far more valuable.
The US's vast wealth and population requires far more than it can domestically support and thus needs to turn to other nations to supply these needs. Luckily because these materials are usually traded on the global market (commodities) the US is no worse off importing these products than they are using their own internal resources (already maxed out).
Therefore while Canada may make money off the trade of oil and electricity to the US, Americans don't spend any more than Canadians do and we might use the energy to heat our homes while the US may use it to produce airplanes for domestic use. And as others above have pointed out, the US is still one of the largest exporters in the world.
The deficit noted by the OP says "$69.9B in August up from $68B in July" an increase of 2.7%. Over the same time period; average oil price was $73 in July and $75 in Aug, an increase of 2.7% exactly. Therefore most of that deficit is likely driven by oil price; a price being driven higher by the expanding US economy. If the US is consuming more oil, this is typical of a growth and wealth generating cycle.
Things the trade data could show:
- a growing debt (bad)
- more foriegn buying of assets (good or bad - frees capital to buy other investments)
- more consumption (growing economy)
- investors taking profits from emerging markets (capital reinvested in the US - look at the S&P)
- importing cheaper goods (more efficient use of resources and capital - people buy $2 shirts instead of $20 allowing $18 to go towards the service industry domestically)
Personally I don't give much value to the trade deficit...
Here's the problem for those that keep reading the Cliff Notes version of the US economy.
A growing, more productive economy where most of the benefit accrues to a sliver of the population is NOT good.
A slower growing, yet still productive economy where much of the benefit accrues across broad swaths of the population is GOOD and more importantly sustainable.
Automation is certainly beneficial but it's even more beneficial if the company producing the machinery employs US citizens. When you pull out the cost of energy from our trade deficit, the other big sucking sound comes from manufacturing jobs just being lost NOT being lost to automation.
Further, a historical energy efficiency increase is just plain retarded. The history of average fleet fuel economy over the past twenty years is a big reason why the trade deficit sux. Could you imagine the benefit of improved fuel economy for cars? A real tax cut for every American not to mention the environmental impact!
The same is true for home and commercial energy use. Obviously, coal and nukes are all domestic but natural gas is a big import product. The application of current, widely available technology could dramatically improve the energy efficiency of our homes and businesses . . . not to mention the benefits of good old conservation (reduced unnecessary use).
On the broader issue of the trade deficit and manufacturing . . . where would you prefer Toyota build their cars and use for suppliers . . . Yokohama and China . . . or Indiana and US-sourced Visteon?
You have to be a pretty simple intellect to look at the current pattern of US economic activity and say, "all is well, we just need more of the same . . . "
A growing, more productive economy where most of the benefit accrues to a sliver of the population is NOT good.
A slower growing, yet still productive economy where much of the benefit accrues across broad swaths of the population is GOOD and more importantly sustainable.
Automation is certainly beneficial but it's even more beneficial if the company producing the machinery employs US citizens. When you pull out the cost of energy from our trade deficit, the other big sucking sound comes from manufacturing jobs just being lost NOT being lost to automation.
Further, a historical energy efficiency increase is just plain retarded. The history of average fleet fuel economy over the past twenty years is a big reason why the trade deficit sux. Could you imagine the benefit of improved fuel economy for cars? A real tax cut for every American not to mention the environmental impact!
The same is true for home and commercial energy use. Obviously, coal and nukes are all domestic but natural gas is a big import product. The application of current, widely available technology could dramatically improve the energy efficiency of our homes and businesses . . . not to mention the benefits of good old conservation (reduced unnecessary use).
On the broader issue of the trade deficit and manufacturing . . . where would you prefer Toyota build their cars and use for suppliers . . . Yokohama and China . . . or Indiana and US-sourced Visteon?
You have to be a pretty simple intellect to look at the current pattern of US economic activity and say, "all is well, we just need more of the same . . . "
And still we grow more energy effecient every year. It may not be at a rate you like, but the trend continues.
Sure we can double or triple fuel economy. All we have to do to make cars aluninum and carbon fiber, add a hybrid engine and a built in solar power charging. Of course only rich could afford to drive then. I know that is what you are shooting for.
We could also restrict imports of of oil and natural gas, but then no one could afford to heat their homes or drive to work. I know that is what you shooting for as well.
LunarRay
Diamond Member
- Mar 2, 2003
- 9,993
- 1
- 76
A trade Deficit is not good... it indicates we can increase the US production and it will be consumed... generally.. of course if the field was level that would be true.. and it is not.. so we close another plant.. or move it somewhere else but still consume what was once made here.. thus increasing the deficit..
The strength of a Nation is measured by its ability to manufacture what it consumes.. if the US can't compete but still consumes.. as in Energy and everything else.. we are pawns.. not end game pieces..
Every nation that consumes our product must be nutty.. what can we make that they can consume that they can't make cheaper and probably better? ... why do they consume what we make now... and when will it end? ...
That is the real question ... motive.. Whitling is right.. Poop will hit fan when we are no longer needed to further the objectives of the world... just wait.. and see.. hopefully.. not for a number of years.. but it will occur.. it is what NAFTA was trying to deal with.. but failing..
The strength of a Nation is measured by its ability to manufacture what it consumes.. if the US can't compete but still consumes.. as in Energy and everything else.. we are pawns.. not end game pieces..
Every nation that consumes our product must be nutty.. what can we make that they can consume that they can't make cheaper and probably better? ... why do they consume what we make now... and when will it end? ...
That is the real question ... motive.. Whitling is right.. Poop will hit fan when we are no longer needed to further the objectives of the world... just wait.. and see.. hopefully.. not for a number of years.. but it will occur.. it is what NAFTA was trying to deal with.. but failing..
Why exaggerate? One of the reasons our nation isn't advancing as it should is b/c a few entrenched interests are quite satisfied with the status quo. Despite the fact that most Americans are getting ridden over instead of coming along for the ride.
Honda produces more fuel efficient AND more powerful engine/vehicles year over year. Ford produced heavier and less fuel efficient (mileage) vehicles. Fortunately, Honda has been expanding manufacturing in America. If we were depending on FoMoCo and GM to keep auto jobs in America, we would be in a terrible plight.
I doubt I said jack about doubling or tripling fuel economy. Granted, real leadership from 1980-present could have easily doubled fuel economy. But even over a much shorter term it is quite obvious that fuel economy has not been a priority in America so we wound up with a bunch of crappy vehicles. In Europe and Japan, they have fast, fuel efficient, AND safe vehicles.
Average fuel economy in Europe is 47% HIGHER than the US with the leader being France at 46mpg. And they aren't all clanking oil burners. I guess aluminum, carbon fibre, hybrid drivetrains, solar panels, and unobtanium is much cheaper across the pond.:roll: The disparity exists b/c Europe had leaders looking towards the future, while America had Reagan, Bush, Clinton, and Bush!t looking to next week.
There's absolutely no reason whatsoever that you would have to RESTRICT imports of oil or natural gas. You just make it Alaska-expensive. People will discover that 72 in the summer and 75 in the winter isn't necessary after all. Having a hot water heater set to 160 is just plain dumb. Double-paned windows, upgraded insulation, and checking for drafts make a lot of sense. Turning off (and even unplugging) what you aren't using and using many appliances/electronics less . . . goes a long ways without affecting your actual lifestyle. Not to mention changing patterns of consumption when it comes to energy used for transportation.
The sum is using less energy and using what you do consume more efficiently. It puts money in everybody's pocket (except shareholders for the utility companies), benefits the society (increased efficiency/productivity), dramatically lowers dependence on foreign energy sources, and dramatically lowers the environmental impact.
The problem is that poor leadership (Executive and Legislative) that lacks vision and a strong constitution has infected the population with an ethos of waste, intellectual laziness and a sense of entitlement.
Even when we get a hint of waking up (biofuels), we do it arse backwards. We're going to take corn and convert it into ethanol instead of taking advantage of the existing infrastructure for diesel (plus a new ultra-low sulfur stock) to move towards biodiesel sourced from rapeseed.
What moron has no clue that diesel has TWICE the energy density of ethanol while the starting stock is far more efficiently produced if its rapeseed instead of corn?!
incredible prognostication on US vs Europe fuel economy 1994
Honda produces more fuel efficient AND more powerful engine/vehicles year over year. Ford produced heavier and less fuel efficient (mileage) vehicles. Fortunately, Honda has been expanding manufacturing in America. If we were depending on FoMoCo and GM to keep auto jobs in America, we would be in a terrible plight.
I doubt I said jack about doubling or tripling fuel economy. Granted, real leadership from 1980-present could have easily doubled fuel economy. But even over a much shorter term it is quite obvious that fuel economy has not been a priority in America so we wound up with a bunch of crappy vehicles. In Europe and Japan, they have fast, fuel efficient, AND safe vehicles.
Average fuel economy in Europe is 47% HIGHER than the US with the leader being France at 46mpg. And they aren't all clanking oil burners. I guess aluminum, carbon fibre, hybrid drivetrains, solar panels, and unobtanium is much cheaper across the pond.:roll: The disparity exists b/c Europe had leaders looking towards the future, while America had Reagan, Bush, Clinton, and Bush!t looking to next week.
There's absolutely no reason whatsoever that you would have to RESTRICT imports of oil or natural gas. You just make it Alaska-expensive. People will discover that 72 in the summer and 75 in the winter isn't necessary after all. Having a hot water heater set to 160 is just plain dumb. Double-paned windows, upgraded insulation, and checking for drafts make a lot of sense. Turning off (and even unplugging) what you aren't using and using many appliances/electronics less . . . goes a long ways without affecting your actual lifestyle. Not to mention changing patterns of consumption when it comes to energy used for transportation.
The sum is using less energy and using what you do consume more efficiently. It puts money in everybody's pocket (except shareholders for the utility companies), benefits the society (increased efficiency/productivity), dramatically lowers dependence on foreign energy sources, and dramatically lowers the environmental impact.
The problem is that poor leadership (Executive and Legislative) that lacks vision and a strong constitution has infected the population with an ethos of waste, intellectual laziness and a sense of entitlement.
Even when we get a hint of waking up (biofuels), we do it arse backwards. We're going to take corn and convert it into ethanol instead of taking advantage of the existing infrastructure for diesel (plus a new ultra-low sulfur stock) to move towards biodiesel sourced from rapeseed.
What moron has no clue that diesel has TWICE the energy density of ethanol while the starting stock is far more efficiently produced if its rapeseed instead of corn?!
incredible prognostication on US vs Europe fuel economy 1994
What is your bank? I want to be a customer too. Say you earn $2000 yet you spend 2200 every single month. And your bank is fine with that forever, indefinately?
How long can we keep it up? As long as oil is traded in dollars. We've actually be running trade deficits for over 30 years, and our economy has only grown stronger. The United States has entered uncharted territory in that we are the "empire" of the world and are net debtors, not creditors. No other empire in the history of the world has done such. So far it's working, and as far as I can tell, there is no end in sight. If our economy goes, so goes the worlds.
The United States has never missed a payment in its over 200 year history, it's bonds are the most valuable and most sure thing you can put your money in. In our case, the "bank" is our own population and some from outside countries. Besides, our one year GDP number is still larger than our total debt. There are many other countries in the world that can't say that, including Japan, who owes trillions itself.
Well I am no economist, but trade deficit is not really connected to the federal debt.
So basically as I understand it you can always keep the trade deficit as long as you can export dollars meaning as long as the world has a growing demand for dollars.
WhipperSnapper
Lifer
- Oct 30, 2004
- 11,442
- 32
- 91
This begs the question, how are you measuring the strength of the U.S. economy? What factors are you looking at?
Originally posted by: BaliBabyDoc
Why exaggerate? One of the reasons our nation isn't advancing as it should is b/c a few entrenched interests are quite satisfied with the status quo. Despite the fact that most Americans are getting ridden over instead of coming along for the ride.
Honda produces more fuel efficient AND more powerful engine/vehicles year over year. Ford produced heavier and less fuel efficient (mileage) vehicles. Fortunately, Honda has been expanding manufacturing in America. If we were depending on FoMoCo and GM to keep auto jobs in America, we would be in a terrible plight.
I doubt I said jack about doubling or tripling fuel economy. Granted, real leadership from 1980-present could have easily doubled fuel economy. But even over a much shorter term it is quite obvious that fuel economy has not been a priority in America so we wound up with a bunch of crappy vehicles. In Europe and Japan, they have fast, fuel efficient, AND safe vehicles.
Average fuel economy in Europe is 47% HIGHER than the US with the leader being France at 46mpg. And they aren't all clanking oil burners. I guess aluminum, carbon fibre, hybrid drivetrains, solar panels, and unobtanium is much cheaper across the pond.:roll: The disparity exists b/c Europe had leaders looking towards the future, while America had Reagan, Bush, Clinton, and Bush!t looking to next week.
There's absolutely no reason whatsoever that you would have to RESTRICT imports of oil or natural gas. You just make it Alaska-expensive. People will discover that 72 in the summer and 75 in the winter isn't necessary after all. Having a hot water heater set to 160 is just plain dumb. Double-paned windows, upgraded insulation, and checking for drafts make a lot of sense. Turning off (and even unplugging) what you aren't using and using many appliances/electronics less . . . goes a long ways without affecting your actual lifestyle. Not to mention changing patterns of consumption when it comes to energy used for transportation.
The sum is using less energy and using what you do consume more efficiently. It puts money in everybody's pocket (except shareholders for the utility companies), benefits the society (increased efficiency/productivity), dramatically lowers dependence on foreign energy sources, and dramatically lowers the environmental impact.
The problem is that poor leadership (Executive and Legislative) that lacks vision and a strong constitution has infected the population with an ethos of waste, intellectual laziness and a sense of entitlement.
Even when we get a hint of waking up (biofuels), we do it arse backwards. We're going to take corn and convert it into ethanol instead of taking advantage of the existing infrastructure for diesel (plus a new ultra-low sulfur stock) to move towards biodiesel sourced from rapeseed.
What moron has no clue that diesel has TWICE the energy density of ethanol while the starting stock is far more efficiently produced if its rapeseed instead of corn?!
incredible prognostication on US vs Europe fuel economy 1994
And for the most part those in Europe drive itty bitty cars. Theyalso can use more diesels ver there. They do this not because of regulation like CAFE, but but extremely high gas taxes. If gas was $5/gallon or more here, we would have a different vehicle selection.
Inexpensive gas has allowed us to afford larger vehicles. IF you want to acheive your goals via higher taxes, so be it. I dont think many people will find it a good idea as it is going to greatly affect their pocket book.
As I have stated several times before, you can't take the total production of a country and then compare that to the sovereign debt of that country and say "they match!". The government is only a part of the economy and is only a moderate obligor compared to the country as a whole.
What you are doing is essentially taking the combined income of a large family with a bunch of teenagers and then only comparing that to the mortgage on the house, excluding student debt, credit cards, and other forms of leverage.
Lets take for example GDP. We know that at least 1/3 of GDP is built off of the latest housing bubble. Furthermore, we also know that the remainder was built off of equity cash out. Those two factors are driven by *CONSUMER* debt, not sovereign debt. Thus, to consider (government debt/EVERYTHING consumers produce) is a BS measurement.
The correct measurement would be to take everything consumers OWE and then divide that by everything produced.
Since America has a negative savings rate *AND* consumer debt is at an all-time high, your numbers become a lot less rosey. Further consider that -1% GDP reduction and the equity cash-out, you start to see that GDP is nothing more than a fictional number built upon leverage, irrational exuberance, and stupidity.
Of course, the all of this will reverse, since a period of incredible growth primarily driven by leverage is only borrowing growth from the future, not actually creating *new* wealth and growth. Thus, we have only locked ourselves into stagnant, or even negative, GDP growth for the future.
The analogy isnt quite right. The govt doesnt resemble anything in terms of personal finances. When it comes up short it can borrow money very easy or tax somebody to make up the difference.
1) Most Europeans don't drive itty bitty cars. They drive cars commensurate with their transportation needs. Accordingly, that $5/gal gasoline means you don't see a bunch of SUVs and dualies with one person in them.
2) I believe the current mix is close to 50% diesel. Then again, it makes sense to use diesels since they dramatically improve fuel economy compared to gasoline . . . even direct injection. Imagine, what the US could do when diesels get out of the single digits?!
3) The Europeans chose NOT to regulate but tax b/c they were smart. They wanted to change EVERYONE'S behavior. As opposed to the US where CAFE left enough wiggle room for manufacturers to produce a) crappy cars, b) relatively unsafe cars, c) grossly overestimate mileage, d) have a category of vehicles that are exempt b/c they are so heavy. In Europe, they taxed the fuel which means consumers choose to drive more fuel efficient vehicles AND reduce unnecessary driving, while manufacturers are free to produce econoboxes, behemoths, and everything in between.
4) Subsidized gasoline has allowed us to WASTE more without facing the consequences of such waste. Then again, arguably that 'thirst' for oil is a reason why we are so wound up with the Middle East, drooling to drill our coasts, and seem absolutely twittertaited by Hugo Chavez.
5) Only a moron buys a larger car than they need. Many of those morons were cursing those vehicles when gasoline prices surged. From the rise in SUV sales, it's apparent the idiots are rushing back now that prices have fallen. All the more reason to raise gasoline taxes and reap the benefits of our European counterparts. Some day . . . sooner rather than later . . . the US will desperately need to use FAR less oil for transportation. It would be nice if that transition is smooth rather than cathartic.
6) It is difficult to overestimate the wealth extraction that has occurred b/c America has to send hundreds of billions of dollars each year to oil exporting countries. It's an indefensible position given the great benefits our country would reap from improved fuel economy. Unfortunately, we are going the opposite direction. US oil consumption will grow by 2% next year. That's another 400k barrels per day from Hugo, Ahmadinejad, House of Fraud, etc. Does that make sense to you?
2) I believe the current mix is close to 50% diesel. Then again, it makes sense to use diesels since they dramatically improve fuel economy compared to gasoline . . . even direct injection. Imagine, what the US could do when diesels get out of the single digits?!
3) The Europeans chose NOT to regulate but tax b/c they were smart. They wanted to change EVERYONE'S behavior. As opposed to the US where CAFE left enough wiggle room for manufacturers to produce a) crappy cars, b) relatively unsafe cars, c) grossly overestimate mileage, d) have a category of vehicles that are exempt b/c they are so heavy. In Europe, they taxed the fuel which means consumers choose to drive more fuel efficient vehicles AND reduce unnecessary driving, while manufacturers are free to produce econoboxes, behemoths, and everything in between.
4) Subsidized gasoline has allowed us to WASTE more without facing the consequences of such waste. Then again, arguably that 'thirst' for oil is a reason why we are so wound up with the Middle East, drooling to drill our coasts, and seem absolutely twittertaited by Hugo Chavez.
5) Only a moron buys a larger car than they need. Many of those morons were cursing those vehicles when gasoline prices surged. From the rise in SUV sales, it's apparent the idiots are rushing back now that prices have fallen. All the more reason to raise gasoline taxes and reap the benefits of our European counterparts. Some day . . . sooner rather than later . . . the US will desperately need to use FAR less oil for transportation. It would be nice if that transition is smooth rather than cathartic.
6) It is difficult to overestimate the wealth extraction that has occurred b/c America has to send hundreds of billions of dollars each year to oil exporting countries. It's an indefensible position given the great benefits our country would reap from improved fuel economy. Unfortunately, we are going the opposite direction. US oil consumption will grow by 2% next year. That's another 400k barrels per day from Hugo, Ahmadinejad, House of Fraud, etc. Does that make sense to you?
A better analysis of our fiscal picture is to acknowledge that the current deficit is structural and likely to worsen before it gets better. That's all you have to know to realize our policies sux even if a snap shot like GDP looks OK.
TRENDING THREADS
-
Discussion Intel current and future Lakes & Rapids thread- Started by TheF34RChannel
- Replies: 23K
-
-
Discussion Zen 5 Speculation (EPYC Turin and Strix Point/Granite Ridge - Ryzen 9000)- Started by DisEnchantment
- Replies: 10K
-
Discussion Speculation: Zen 4 (EPYC 4 "Genoa", Ryzen 7000, etc.)- Started by Vattila
- Replies: 13K
-
Discussion Intel Meteor, Arrow, Lunar & Panther Lakes Discussion Threads
- Started by Tigerick
- Replies: 7K
Facebook
Twitter