The trade deficit as a percent of GDP is deep in the red. It is wrecking our economy just like termites eat wood. Ever see termite raddled wood? It looks normal on the surface but is hollow and ruined and collapses when touched. So is our economic system. It floats along effortlessly only because foreign powers keep trading with us…so long as it is one-way trade! Below is an article in an anti-free trade blog run by the ‘Alliance for American Manufacturing’ which is an organization I wish was effective but sadly, they also cannot bear to see the truth of our dire situation. I assume, due to fear.
Every once and a while, people notice the huge, ugly, destructive trade deficit. Then they go into madness and denial and over the years, I have seen a strong shift from being terrified about a trade deficit to excuses about how this is really a great thing and aren’t we smart and rich thanks to the trade deficit. This is insanity. And US workers have been made significantly poorer due to world trade.
Here is an article written by Don C. Morton for the Alliance for American Manufacturing.
Don advocates for smart infrastructure, tax, and trade policies that underpin a strong U.S. domestic manufacturing sector. You can follow Don Morton on Twitter @dcsmorton.
Prior to joining AAM, Don worked as a writer at the Center for Strategic and International Studies (CSIS), telling complex policy stories through audio, video, print, and digital media. As a State Department fellow he covered agricultural trade and food safety issues during the H1N1 flu epidemic and the 2010 Haiti earthquake. He started his career with Congressman Chris Van Hollen (D-MD).
Don received his master’s degree in international trade and finance from the Johns Hopkins School of Advanced International Studies (SAIS) and his bachelor’s degree in economics from Dickinson College. Don lives with his wife Erin in the Shaw neighborhood of Washington, DC.
This man is one of the many drones and useful idiots who have designed US foreign trade policy over the years. They teach in our universities the most outrageous, stupid stuff. Then thousands of new drones exit the hive to take up work in the Real World by making historic mistakes of the gravest kind. Refusing to understand history, they have lulled themselves into believing that red ink doesn’t matter.
Here is his article explaining how the US is very much the strongest economy on earth even as this is done by running absolutely everything in the red and into destruction: No, America is Not No. 2. | Alliance for American Manufacturing
When you compare the two economies using actual U.S. dollars rather than Crocs, there’s no competition: China’s total economic output is just 56 percent of the United States’ $16.8 billion.
And purchasing power parity (PPP) helps us compare the economic lives of Chinese citizens to individual Americans. To do so, we have to look at things per capita.
The young man who wrote this delusional article didn’t look at DEBT. The all-important red ink. I have no debts. My property and belongings all belong to me, totally. I own it all. No debts. The US isn’t so lucky. Indeed, we are the deepest in debt of all nations. Red ink isn’t vanishing ink. It is future promises to someone else in this case, China. We owe China which makes China our boss.
Of course, the nefarious plan our rulers have is to default on this massive multi-trillion debts to China via launching WWIII. Got that? See, the plot is, China bombs Detroit (HAHAHA) while we bomb China’s manufacturing base and then we win! And get rid of all the inner city blacks, while blaming China for this.
Except China isn’t stupid. Why bomb cities the US elites are destroying? No point in that. What will be destroyed in WWIII is all the remaining stuff we use to run this country especially our nuclear power plants and of course, our military bases. If the Chinese are really cruel, they won’t bomb Washington DC at all. (sarcasm here)
U.S. Trade Gap with China, 80% of Trade Deficit, Hits Historic High – Real Time Economics – WSJ claims but I don’t know, it doesn’t look right, then there is this: US Trade Deficit Would Shrink with Stroke of a Pen | Public Policy content from IndustryWeek
The United States now has a trade deficit with 88 countries according to data in the book, Buying Back America by Alan Uke. Some deficits are small, but some are enormous. Our top six trading partners – Canada, China, Mexico, Japan, Germany, and South Korea – represent 64% of our total trade deficit. In 2013, our total trade deficit in goods was $688.4 billion, of which China represented 46% at $318.4 billion. However, our total trade deficit with China since 1994 is $3.287 trillion.
The ‘stroke of a pen’ is this accounting device whereby things shipped to China for assembly and then returned are counted not as manufacturing but ‘services’ which is madness. Just like when they cut out fuel and food and other necessities from inflation statistics, giving us fake information now and thus enabling the ZIRP loans to the richest banks, this fiddling of the facts is being done to hide the truth, not give us better information.
Trade Balance: Goods and Services, Balance of Payments Basis – FRED – St. Louis Fed–$43.4 billion in the red this year.
From the Heritage Foundation which is a right wing organization that loves Reagan and his tax cuts, complaining about goverment deficits: Government Spending: Growth and Trend Charts of US Federal Spending by Year
The only ‘blue’ period was when the Democrat, Clinton, was running the joint! We then plunged back into deficits with more tax cuts and lots of warmongering, especially the trillions of dollars of red ink during the Bush wars. The biggest deficits came from the bank bail outs.
Both the Democratic ‘liberals’ who are fakers and the equally fake ‘conservative’ Republicans like to lie about taxes, inflation, the budget deficit and theTrade Deficits aren’t good or bad, just weird | Marketplace.org:
“There’s actually nothing necessarily wrong about a trade deficit,” says Doug Irwin, professor of economics at Dartmouth. “In fact, here’s where economists always have a definitive answer to the question is a trade deficit good or bad and that definitive answer is, it depends!”
Incredible! When Chairman Mao sent some cadres to the US to learn about world trade and finance, they were going to take classes from our heroic economic experts teaching in our schools here. They were NOT HAPPY with their classes so I began teaching them in the basement of our home. We then went forth to gain some money by applying the lessons we were following. One day, the light bulbs flickered on and Sheng yelled, ‘I like money!’
The Chinese are not stupid. They have a good idea what is going on here. They certainly understand world trade, they are the masters of this. They are not so stupid as to be in denial about red ink. The Japanese aren’t stupid, either. They just dug themselves into a grave of a different sort. Unable to open up to foreigners, they are increasingly out of step and isolated unlike the Chinese.
Here comes the utterly insane part of professor Irwin’s beliefs:
The fact is, there ARE people abroad who want to give us Euros in exchange for dollars. These are not people who want to buy our stuff, though. These are people who need dollars…because….drum roll…. they want to INVEST in America. They’re investors…
This invisible connection between trade deficits and foreign investments is why a trade deficit can be good or bad—all it means for sure is that other countries are coming to you to invest their money. That can be great if it’s growing your economy or it can be bad if it’s not—you can’t tell what’s going on just from having a trade deficit.
These are not just ‘investors’. We have a proper name for them: OWNERS. Yes, they own us. Just like I own everything I survey at my home which I built myself with my own hands, so it is with the Chinese and anyone who takes advantage of our insane trade policies. They own us, not us owning them.
This is a very simple lesson. Day one of Elaine’s school of economics for Chinese communists, I announced to them that I owned my house they were all in. Every inch of it. They didn’t believe me. I demonstrated this in every way I could. The day of enlightenment came when the Chinese panicked in Beijing and sent a State Police guy to spy on everyone.
He tried to move into my house. Everyone was scared to death of him…but me. I said to Sheng, ‘Who is this man and did you let him into MY house?’ He nodded. I told the man to leave. He said no! I grabbed him by the shoulders and behind and yanked him out of the chair, up the stairs and threw him into the street with a fair amount of propulsion.
He yelled in Chinese that he would be back. So I dragged Sheng with me to the Chinese consulate in Manhattan and ordered them to send a message to Beijing telling the bosses there to not step on my toes again. They apologized. Sheng was impressed.
Understanding reality is life and death and our country is sailing off the cliff pretending red ink doesn’t matter and politics can be played endlessly with no consequences. This is delusional as well as frankly, if I were an alien in outer space spying on humans, funny as hell in a sad way. But then, we are talking about people who have messed up the weather data so badly they can’t predict even three days of weather.
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