America Is NOT The World’s #1 Economy, It Is The World’s #1 Red Ink Nation

deficits part of GNP relentlessly in the red for 40 years

Calculated Risk: U.S. Trade Deficit Graphs

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.

US trade deficit 1992 2013

 

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

 

Screen shot 2015-01-01 at 12.19.27 PM

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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20 Comments

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20 responses to “America Is NOT The World’s #1 Economy, It Is The World’s #1 Red Ink Nation

  1. melponeme_k

    OT

    At my job, we keep the finance channel running which is a 24 hour channel of lies. I ignore it.

    But this caught my attention, the price of eggs will go up. The channel began to blame the new CA law that demanded poultry have more breathing room and be able to roam a bit.

    But that didn’t sound right to me. It sounded more like…people not being able to afford red meat anymore which killed the livestock futures market.

    Then I found this…

    http://www.bloomberg.com/news/2014-11-25/shorting-chickens-becomes-hot-trade-after-prices-surge.html

    The real reason behind growing egg prices. This is where the majority of the nation’s protein comes from now that meat is off the table. So the vultures have moved to bidding up and bidding down poultry futures.

    There used to be restrictions against this practice. But not in today’s world. Heck we are all roasting to death…aren’t we? XP

  2. ziff

    what do you think of this from Armstrong? same conclusion, but

    ”The expansion of the money supply of dollar has FAILED to produce any inflation BECAUSE the old theories have failed to take into consideration the global nature of the world economy and its demand for the currency of the current Financial Capital of the World. This is WHY the dominant currency has ALWAYS been imitated because people had confidence in the dominant currency – NOT the mere fact it was tangible.

    This has always been a CONFIDENCE game. You cannot forecast markets based upon old theories that fail to take into account the real trend historically. Yes debasement of a currency results in the decline in the purchasing power of a currency when we are talking about single nations. This does not apply to the dominant currency based upon simple supply for the demand stretches far beyond the borders and is by no means limited to only that nation. Eventually the dollar will collapse, not because of QE, but because the world is headed into a black-hole of finance and the debt will destroy everything as it always has. Yet the US national debt of about $18 trillion is nothing within a sea of $150+ trillion in debt globally. The US cannot print enough money to meet the world demands.

  3. emsnews

    Which returns to the US in the form of aliens buying up everything. Ergo: they own us with this flood f friendly dollars!

    Money printing of this sort is very fatal in the long run. But then, people have been repeatedly enslaved over the course of history.

  4. Gurrker

    I raised my sons and advised my nephews repeating, ad nauseam, “Debt is the road to slavery”. I believe this to be true for individuals and governments equally. You have it right when you say OWNERS. The citizens of our country are badly deluded and do not take well to having this pointed out to them. I have a dear friend of 50 years standing (a true “progressive” liberal) who won’t speak to me right now because I have the temerity to 1.) question his global warming orthodoxy, and 2) not buy in to the endless Krugman articles he forwarded from the NYT. This is a guy who filed for bankruptcy about 15 years ago (caused by his spending beyond his income) and invested in bags of silver coins because he thought that they were a liquid investment (still does in some ways). When sending me articles to “support” his positions I inevitably receive something from the NYT. He calls sources I reference “sketchy” (Paul Craig Roberts, Information Clearing House, Moon of Alabama, Pepe Escobar, the Saker to name a few) if they are outside of his box and accuses me of not using my “excellent” education. I tell him I read the propaganda issued by our MSM and the propaganda issued by those on the other side of our current conflict. I am searching for the truth and I know nobody has a monopoly, it is intellectually dishonest to not try to canvas all sides. I think he has about given up on trying to bully me into agreement. Sadly, I perceive that bullying is a favorite tactic of those who believe as he does. These folks generally don’t believe debt is a big problem. I find myself thinking how can it be that people who have it so wrong can believe they totally have it right?

    BTW Happy New Year

  5. The Dollar will collapse when the Saudi’s et al demand payment for oil in currencies other than the Dollar.

  6. Ken

    Elaine points out that the only time in recent history when the budget was balanced was under Clinton’s presidency. Looking at this a different way, the only balanced budget occurred under the Republican Congress led by Newt Gingrich and his “Contract with America” policies. Liberals hated him, and eventually succeeded in driving him out of Congress. Personally, I’m not a big fan of his either. However, it’s hard not to see the correlation.

    On the positive side, we once again have a Republican Congress and a Democratic president. Perhaps this is a winning combination.

  7. Petruchio

    Reading commentary like this, I recall a number regarding the largest UAW Local in Michigan. At the height of Detroit’s auto manufacturing, this Local had some 48,000 members. Now the membership number is around 850. Imho that says it all. Re The Heritage Foundation. Anyone with an IQ over 25 knows that Heritage is a ruling class mouthpiece whose chief mission is to lie and give these lies a veneer of respectability. Re Doug Irwin. He wouldn’t be an “economics” professor at Dartmouth if he doesn’t mouth the ruling class line about government spending and lie about the true causes of the state of the economy. Irwin, like most of the paid whores posing as “economists” know full well how damaging the trade deficit truly is. There’s NO denial involved with these guys. They know.

  8. e sutton

    Does anyone know when exactly we lost control of the government that controls our country? Not that it matters much anymore, because I really believe we are completely beyond redemption. There have been several nails in the coffin. Some say it happened with the Federal Reserve Act of 1913. Other say it happened with the Civil War. Still others claim that it happened with the introduction of Israel after WWII. At any rate, I wonder what good it is to own your own home outright (I do, too) when eventually the Chinese will own everything and probably just up our taxes as to make us virtual renters and/or sharecroppers. Also, Elaine says “Money printing of this sort is very fatal in the long run.” What is meant by “the long run”? Any possibility that we can put “the long run” off until I’m pushing up daisies? 😀

  9. Christian W

    Elaine, can you expand on who exactly are the Owners and how the markets work?

    It seems to me it is the rich elites overseas that buy up stuff in the US as well as governments and huge corporations or hedge funds acting on behalf of the foreign elites. Every dollar invested in the US is a dollar not invested in the foreign nation’s own economy.

    The US countermeasure to this unpayable debt development is to start a soft war, or hot war, with anyone who actually wants to have the US pay for anything directly or break up the current model. This means the US declares the other nation hostile and start sanctions against that government freezing (read – stealing) all the “assets” already within the US economy and try to impose a new government that plays according to the US rule book.

    Since the US controls the finance markets it is difficult for the foreign nations to finance the operations of their own markets and corporations without access to dollar denominated loans, especially when it comes to international trade. This is the death grip the Russians eg are trying to break out of.

  10. Gavin

    Debt is misunderstood. Whether debt is destructive depends upons its intended use. Credit can be extended (debt incurred) for productive use whereby an idea can be developed, a process improved, or a valuable service delivered which raises a community’s standard of living. In this case, the debt is self-liquidating.

  11. Seraphim

    @Refusing to understand history, they have lulled themselves into believing that red ink doesn’t matter.

    It might appear unrelated, but it is the same in the case of King Arthur and Jesus.

  12. Petruchio

    “Since the US controls the finance markets it is difficult for the foreign nations to finance the operations of their own markets and corporations without access to dollar denominated loans, especially when it comes to international trade. This is the death grip the Russians eg are trying to break out of.” I’m wondering for how long the Russians will refrain from any sort of active countermeasures. I’m reasonably certain the Russians have a “thug” department and they wouldn’t hesitate to confront US thugs if Vlad gives the go ahead. We are all fortunate that Vlad Putin is such an intelligent, sensible man. It has been non-physical violence so far, but it isn’t hard to imagine this “soft” war by the US against Russia going hot. Then the s#it will hit the fan.

  13. Pingback: US Trade Deficit

  14. Sunger

    Clinton did not really balance the federal budget. The surplus came from a super mass of capital gains taxes from the 90s stock boom. Of course all talk of a surplus evaporated after the tech crash in 2000.

  15. Petruchio

    ” If the Chinese are really cruel, they won’t bomb Washington DC at all. (sarcasm here)…” Elaine: you stepped over the line with this comment! HaHa.

  16. melponeme_k

    This is the new scheme by Diblasio to legitimize the illegal aliens in the NY area. As if these people will keep jobs when businesses have to pay taxes for them.

    http://www1.nyc.gov/site/idnyc/about/about.page

    They also have it tied into numerous art events. Which will doubt affect their future funding.

  17. Luke

    “The only ‘blue’ period was when the Democrat, Clinton, was running the joint! “. Jim Rogers [Quantum Fund-Soros] says ‘Clinton cooked the books. He ran a deficit as well’.

  18. melponeme_k

    Another child had to suffer an attack so some sicko could get a thrill out of owning a dangerous animal (Pit Bull). When will these dogs be outlawed?

    http://www.dailymail.co.uk/news/article-2895643/Boy-10-faces-years-facial-reconstructive-surgery-mauled-pit-bulls-riding-scooter-got-Christmas.html#comments

  19. Mewswithaview

    1.6 trillion dollars and but nothing but bad outcomes to show for it. And it’s still not over! I guess mainstream media will drop it down the memory hole because it’s “officially” over.

    http://www.fas.org/sgp/crs/natsec/RL33110.pdf

    http://www.bloomberg.com/politics/articles/2014-12-06/hagel-visits-afghanistan-as-us-combat-mission-nears-end

  20. emsnews

    Just this week the ‘liberal’ Huffington Post had a headline story about ‘cute pit bull pictures’ showing how ‘adorable and loving’ they are and by putting photoshop flowers on their heads, they are ‘transformed’.

    Why ‘liberals’ are working so hard to get people to own pit bulls is a mystery but perhaps this is all about people being killed by their own dogs? But why wipe out one’s own supporters?

    Sheesh.

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