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Originally posted by MaskedAvatar
So... how do you express the worst trade deficit ever in terms that people understand?
The impending disaster to American markets will not occur for a simple reason. Our behavior is not going to change any time soon. We have a $120 Trillion country with a miniscule $4.5 Trillion external debt (43% of which is owed foreigners) that couldn't be less significant in the scheme of things. On top of that the country's net worth is growing at the rate of $5 Trillion to $10 Trillion every year. Further, we are:
1…….benefiting from lower prices for so many goods (including those for our domestic businesses) it is straining the storage capacity of the average home in America.
2……..avoiding the additional tax burden that tariffs would have imposed on American consumers were it the government's policy to protect American jobs.
3……..helping to industrialize the poor nations of the world by financing them with a free trade policy and buying their goods and services
4……..promoting the democratic form of government through economics; promoting free markets to help emerging nations get on their feet
who has a stronger economy than the Unites States? The United States still exports more than any other country.
A trade deficit means you DID (past tense) have a strong economy.
If a Trade Deficit is so good, why are all other countries striving for a Trade Surplus???
"Exorbitant Privilege," or, How Worrisome Is the U.S. Trade Deficit?
1. Back in the 1960s Charles de Gaulle would complain about the "exorbitant privilege" that accrued to the United States by virtue of its role as the key currency in the post-World War II Bretton Woods international monetary system. Other countries had to worry about their balances of payments: they had to constrain demand or go through the distress of a devaluation in order to balance their trade. But the United States did not: it could simply print extra dollars to cover whatever excess of desired imports over desired exports happened to exist.
The first exorbitant privilege is that foreign central banks prefer to hold their reserves in dollar-denominated assets--and as the world economy expands, they want to hold more and more of such dollar-denominated assets. That finances a component of the trade deficit: after all, if they want to buy dollar-denominated assets, they first need to acquire dollars by convincing us to buy imports.
The second exorbitant privilege is that rich people in many foreign countries think that dollar-denominated assets--large sums of money in the Vanguard funds or somewhere in Citigroup--are an important part of their political risk insurance portfolio.
The third exorbitant privilege is that even if the rich abroad are confident about the political stability and economic prospects of your native land, the United States is still a very, very nice place to live in many, many ways.
US economy looks strong because US get away with something that other countries don’t.
When US runs out of money it just keep on printing more, is called borrowing and that is what is causing our deficit right now.
Example the big conglomerate Wal-Mart, he is inundating our markets with chip products because it have them made by China
then in 1990s and early 2000s due to not enough demand and the unemployment of the countries we sold too.
Originally posted by Trent
That site, theoptimist123.com you get your info from certainly does paint a bright and shiny picture for world economics but that graph doesn't exactly show the big picture IMO. History has proven that humans are builders rather than destroyers like that site said but we also do compete for money, resources ect. this has not changed. The US can scarcely prevail as the global superpower if its economic fundamentals are weak.