The trade deficit is NOT a bad thing. Get over it.

I'm sick of seeing people, in the real world and online, including YouTube videos and comments, going on and on about the trade deficit as if it's a bad thing. Here I try to set the economics straight.

We don't need to "fix" the trade deficits. We need SOUND MONEY.

Category:

News & Politics

Tags:

• trade
• deficit
• sound
• money
• foreign
• exchange
• dollar
• euro
• ron
• paul

[1dgg9h4dr6ppp8]

You are an idiot. What a dream world. The trade deficit is the most serious problem facing the country. Every one of your explanations were very, very poor and unclear to anybody with a brain.

[shanedk]

@1dgg9h4dr6ppp8 As the video CLEARLY shows, even if we imported and exported EXACTLY the same amount of goods and services, but just stopped ALL foreign investment, the "trade deficit" would be reduced to ZERO. This shows that the whole thing is a sham.

Which is why REAL ECONOMISTS DON'T CALL IT A TRADE DEFICIT. They call it "Net Foreign Investment." Because that's what it IS.

[interstate317]

what if rather than investing extra dollars, they just hoard it? that way in a future date they wont have to buy more dollars to buy American goods, they can just use existing ones. That way, when Americans try to trade in their dollars for yuan, the Chinese say "no thanks, I've got plenty of those, thank you!" and the dollar loses significant value.

[shanedk]

@interstate317 It doesn't work that way. The exchange rate would adjust itself to make it more worthwhile.

[interstate317]

@shanedk "the exchange rate would adjust itself..."

Unless of course you had a currency peg, which is why I used China in this example

[shanedk]

@interstate317 Well, yeah, price controls are like that. But then, China would be the big losers in that case. Just ask Argentina.

[tutorialconr]

Thanks for posting this video and expressing your opinion. Even though many people think it is wrong, I thank you for your effort to explain this.

[efg36]

In the Real World, Hans dont buy US-Cheese at all. And no one else.

The Point is, that the point comes than the US is forign owned.

[FluxCapacitor2008]

Fact is, most products are NOT Made In America anymore due to corporate greed. Since the Chinese will sweat for hours sewing clothes, making car parts or Barbie dolls for 1/10th of American wages, greedy corporations have come to realize that they can't lose through the safety net called globalization. The only ones who do lose are the millions of Americans who become jobless as their jobs are been shipped overseas.

[FluxCapacitor2008]

Republican party is 1000% on the side of big corporations. The very companies who have out-sourced all of the U.S. jobs in manufacturing

[regelemihai]

@porche75 "China is not reciprocating the purchase of American goods."

Why should it? The factories in China that produce and export all of our consumer goods to us are owned BY AMERICAN COMPANIES. Therefore, the net gain in profits belongs to us, not to them. The only thing they get in return is an increase in employment. If a US company manages to produce something cheaper in a foreign country and sells it for a profit, in what way is it losing in this so called trade war with China?

[dtvgmedia]

While some look at trade deficits as the problem. In reality they are symptoms of a much deeper rooted problem. We are chasing producers out of the country with the worlds highest corporate income tax rate.

[dtvgmedia]

As we continue to try to tax income, companies ship more jobs overseas, and hold down wages as corporate income taxes cause an exportation of intellectual property and high priced talent.

[dtvgmedia]

Long term trade deficit is exporting the countries wealth, selling off assets with other counties buying government debt that pays for increased spending because of fewer domestic producers to fund continue current government spending.