Trade Deficits Quotes

quality of life isn’t measured only by what we gain, but also by what we trade for it.

The last time such a loss occurred was during the 1930s, and what makes it such a concern this time is that the dismal job creation statistic has been accompanied by huge and rising budget deficits, large and persistent trade deficits, enormous indebtedness, a low saving rate, a worsening state of indispensable modern infrastructure, poor achievements in education for the masses, worrisome public health (marked by a historically unprecedented incidence of obesity)—and a grossly dysfunctional government to run it all. When seen from this perspective, the state of US manufacturing is a clear cause for concern.

We're going to build a wall and Mexico is going to pay. And the reason they're going to pay and the way they're going to pay, Bob, is this. We have a trade deficit now with Mexico of $58 billion a year. The wall is going to cost $10 billion a year. That's what it's going to cost. It's going to be a powerful wall. It's going to cost $10 billion.

When other countries run sustained trade deficits, they must finance these by selling off domestic assets or running into debt — debt which they actually are obliged to pay. It seems that only the Americans are so bold as to say “Screw the world. We’re going to do whatever we want.” Other countries simply cannot afford the chaos from which the U.S. economy is positioned to withstand as a result of the fact that foreign trade plays a smaller role in its economy than in those of nearly all other nations in today’s interdependent world. Using debtor leverage to set the terms on which it will refrain from causing monetary chaos, America has turned seeming financial weakness into strength. U.S. Government debt has reached so large a magnitude that any attempt to replace it will entail an interregnum of financial chaos and political instability. American diplomats have learned that they are well positioned to come out on top in such grab-bags.

In another discussion with the president, Cohn unveiled a Commerce Department study showing the U.S. absolutely needed to trade with China. “If you’re the Chinese and you want to really just destroy us, just stop sending us antibiotics. You know we don’t really produce antibiotics in the United States?” The study also showed that nine major antibiotics were not produced in the United States, including penicillin. China sold 96.6 percent of all antibiotics used here. “We don’t produce penicillin.” Trump looked at Cohn strangely. “Sir, so when mothers’ babies are dying of strep throat, what are you going to say to them?” Cohn asked Trump if he would tell them, “Trade deficits matter”? “We’ll buy it from another country,” Trump proposed. “So now the Chinese are going to sell it [antibiotics] to the Germans, and the Germans are going to mark it up and sell it to us. So our trade deficit will go down with the Chinese, up with the Germans.” U.S. consumers would be paying a markup. “Is that good for our economy?” Navarro said they would buy it through some country other than Germany. Same problem, Cohn said. “You’re just rearranging deck chairs on the Titanic.

People in Japan and the Faeroe Islands kill dolphins and pilot whales by running steel rods into their spinal columns while they squeal in pain and terror and thrash in agony. (In Japan, it’s illegal to kill cows and pigs as painfully and inhumanely as they kill dolphins.) The lack of compassion for dolphins and whales indicates that humans’ “theory of mind” is incomplete. We have an empathy shortfall, a compassion deficit. And human-on-human violence, abuse, and ethnic and religious genocide are all too pervasive in our world. No elephant will ever pilot a jetliner. And no elephant will ever pilot a jetliner into the World Trade Center. We have the capacity for wider compassion, but we don’t fully live up to ourselves. Why do human egos seem so threatened by the thought that other animals think and feel? Is it because acknowledging the mind of another makes it harder to abuse them? We seem so unfinished and so defensive. Maybe incompleteness is one of the things that “makes us human.

Guess what? None of these guys said anything when the Trump administration added $1 trillion to the federal budget deficit by the end of 2019—before a single dime was spent on COVID-19 relief. They were rubber stamps for it in Congress. Many of them who raised huge stinks about TARP were only too happy to let Trump bail out farmers hurt by his trade war with China. These are the same people who were willing to destroy our economy to make their point but went on to suddenly abandon this core principle.

America has, in fact, run trade deficits large enough to wipe out its gold hoard under the old rules of the game. Still, the idea of the gold standard was not to deplete nations of gold, but rather to force them to get their financial house in order long before the gold disappeared. In the absence of a gold standard and the real-time adjustments it causes, the American people seem unaware of how badly U.S. finances have actually deteriorated.

The complexities of national deficits, trade failures, budget gaps, negotiations to end the nuclear arms race, the crises of the Middle East, all these cannot be understood by giving the facts alone. The public needs appropriate historical background and clarification. People who are not taught much geography, history, economics, and physics simply cannot reach reasonable conclusions without help from specialists. This is not elitism, it is something far more important; it is called education.

The moment American bankers stop lending dollars to Argentina, the country is unable to refinance its mountain of dollar debt. Again, Greece is similar. Even though it has the same currency as Germany, the euro, the chronic Greek trade deficit with Germany translates into a constant flow of loaned euros from Germany to Greece so that the Greeks can keep buying more and more German goods. The slightest interruption in the flow of new loans from the surplus country to the deficit country causes the whole house of cards to collapse. This is when the IMF steps in. Its personnel fly into Buenos Aires or Athens, take black limousines to the finance minister’s office and state their terms: we shall lend you the missing dollars or euros on condition that you impoverish your people and sell the family silver to our mates, the oligarchs of this country and the world. Or words to that effect. That’s when TV screens fill with images of angry, and often hungry, demonstrators in Buenos Aires or Athens. Time and again history has shown that the periodic economic recessions that result from trade imbalances poison the deficit country’s democracy, incite contempt for its people in the surplus country, which then prompts xenophobia in the deficit country. Simply put, sustained trade deficits – and surpluses, their mirror image – never end well.

The only solution was to tie the hands of macroeconomic policy makers.7 Instead of giving the Federal Reserve discretion to trade lower unemployment for higher inflation, the central bank should be forced to accept the fact that a certain amount of unemployment was necessary to keep inflation stable. As we will see, MMT contests this framework.

The old imperialism had the ‘advantage’ that the leading metropolitan power of the time, Britain, could keep its economy open to the goods of the then newly-industrializing countries, without getting indebted (on the contrary it became the largest capital exporter in the years before the First World War). For at least four decades up to 1928, India had the second largest export surplus in the world (second only to the USA); and this despite the imports of goods that caused domestic de-industrialization. But this export surplus was entirely appropriated by Britain not only to pay for its current account deficit with continental Europe, North America and regions of recent European settlement, but also to allow it to export capital to these regions.

The US was forced to withdraw troops from Iraq after an extremely costly decade-long military occupation, leaving in place a regime more closely allied to Iran, the US’ regional adversary. The Iraq war depleted the economy, deprived American corporations of oil wealth, greatly enlarged Washington’s budget and trade deficits, and reduced the living standards of US citizens. The Afghanistan war had a similar outcome, with high external costs, military retreat, fragile clients, domestic disaffection, and no short or medium term transfers of wealth (imperial pillage) to the US Treasury or private corporations. The Libyan war led to the total destruction of a modern, oil-rich economy in North Africa, the total dissolution of state and civil society, and the emergence of armed tribal, fundamentalist militias opposed to US and EU client regimes in North and sub-Sahara Africa and beyond. Instead

The idea behind both concepts is that there must be an accounting, a ledger in the hearts and histories of a family. As if accepting a sum or taking a life will fill the void of the loss of a loved one." "It can't fill the void, but it can make things even," Adam said. "No. It does not. What you get is a deficit of two." "Then both are at an equal loss." Adam took a deep drag on his beer. "And how does this loss serve the memory of the loved one?" "It doesn't ... [v]engeance is selfish," Adam continued. "I've never tried to hide that." "Ah," Philip said. "Now we get to the heart of it. Adam, here is my question for you. Would you trade your claim to vengeance to set your brother free?" Talia watched the muscle twitch in Adam's jaw. It was a hard question, an impossible, painful question, especially after learning that Jacob had chosen his current state. Jacob had chosen to take the lives of his parents. He had reduced Adam's world to a haunted hotel with a group of mad scientists. Maybe she should say something. Change the subject. Seen any naked pictures of me today?

The difference gave China a $420 billion trade surplus (the US carried the opposite, a $420 billion trade deficit with China). Americans paid for those goods with US dollars, and those payments were credited to China’s bank account at the Federal Reserve. Like any other holder of US dollars, China has the option to sit on those dollars or use them to buy something else. Uncle Sam doesn’t pay interest on the dollars China keeps in its checking account at the Fed, so China usually prefers to move them into what is effectively a savings account at the Fed. It does this by purchasing US Treasuries. “Borrowing from China” involves nothing more than an accounting adjustment, whereby the Federal Reserve subtracts numbers from China’s reserve account (checking) and adds numbers to its securities account (savings). It’s still just sitting on its US dollars, but now China is holding yellow dollars instead of green dollars. To pay back China, the Fed simply reverses the accounting entries, marking down the number in its securities account and marking up the number in its reserve account. It’s all accomplished using nothing more than a keyboard at the New York Federal Reserve Bank.

During his visit to India in December 2010, the soft-spoken Chinese Premier Wen Jiabao seems to have succeeded in convincing Prime Minister Manmohan Singh that the border dispute between the two countries belongs to the past, won’t be easy to resolve, and requires patience. Instead of using whatever diplomatic language was necessary to call this statement pure poppycock, the even more soft-spoken Dr Singh appears to have succumbed completely. When Mr Jiabao was asked whether he would advise Pakistan to stop terrorist activity, he made it clear that he would not. ‘That’s for the two of you to resolve,’ he bluntly said. Our prime minister obviously tried to flatter his guest in the hope of getting some response which he could sell to the Indian people when he declared that ‘the world will listen when India and China will speak with one voice’. The response he received to this piece of flattery was, ‘Our relationship is greater than the sum of its parts.’ To me the statement is an attractive piece of diplomatic craftsmanship meaning nothing. Without any countervailing advantage, the visit yielded a trade pact which will take the bilateral trade to $100 billion by 2015, a complete economic sell-out in a year when the trade deficit was already approximately $20 billion.

Everyone has had the experience of suddenly feeling intense physiological and psychological shifts internally at trading glances with another person; such shifts can be exquisitely pleasurable or unpleasant. How one person gazes at another can alter the other’s electrical brain patterns, as registered by EEGS, and may also cause physiological changes in the body. The newborn is highly susceptible to such influences, with a direct effect on the maturation of brain structures. The effects of maternal moods on the electrical circuitry of the infant’s brain were demonstrated by a study at the University of Washington, Seattle. Positive emotions are associated with increased electrical activity in the left hemisphere. It is known that depression in adults is associated with decreased electrical activity in the circuitry of the left hemisphere. With this in mind, the Seattle study compared the EEGS of two groups of infants: one group whose mothers had symptoms of postpartum depression, the other whose mothers did not. “During playful interactions with the mothers designed to elicit positive emotion,” the researchers reported, “infants of non-depressed mothers showed greater left than right frontal brain activation.” The infants of depressed mothers “failed to show differential hemispheric activation,” meaning that the left-side brain activity one would anticipate from positive, joyful infant-mother exchanges did not occur — despite the mothers’ best efforts. Significantly, these effects were noted only in the frontal areas of the brain, where the centers for the self-regulation of emotion are located. In addition to EEG changes, infants of depressed mothers exhibit decreased activity levels, gaze aversion, less positive emotion and greater irritability. Maternal depression is associated with diminished infant attention spans. Summarizing a number of British studies, Dale F. Hay, a researcher at the University of Cambridge, suggests “that the experience of the mother’s depression in the first months of life may disrupt naturally occurring social processes that entrain and regulate the infant’s developing capacities for attention.

Hong Kong became a British colony after the Treaty of Nanking in 1842, the result of the Opium War. This was a particularly shameful episode, even by the standards of 19th-century imperialism. The growing British taste for tea had created a huge trade deficit with China. In a desperate attempt to plug the gap, Britain started exporting opium produced in India to China. The mere detail that selling opium was illegal in China could not possibly be allowed to obstruct the noble cause of balancing the books. When a Chinese official seized an illicit cargo of opium in 1841, the British government used it as an excuse to fix the problem once and for all by declaring war. China was heavily defeated in the war and forced to sign the Treaty of Nanking, which made China 'lease' Hong Kong to Britain and give up its right to set its own tariffs. So there it was-the self-proclaimed leader of the 'liberal' world declaring war on another country because the latter was getting in the way of its illegal trade in narcotics. The truth is that the free movement of goods, people, and money that developed under British hegemony between 1870 and 1913-the first episode of globalization-was made possible, in large part, by military might, rather than market forces. Apart from Britain itself, the practitioners of free trade during this period were mostly weaker countries that had been forced into, rather than had voluntarily adopted, it as a result of colonial rule or 'unequal treaties' (like the Nanking Treaty), which, among other things, deprived them of the right to set tariffs and imposed externally determined low, flat-rate tariffs (3-5%) on them.

The world is in the midst of a war, but it is not the kind of war you may be imagining. It is a currency war in which nations compete to lower the value of their currency in order to help their industries gain greater profits from exports. The currency disputes have arisen from a conflict of interest between the United States and China. The U.S. has been struggling against a massive fiscal deficit and foreign debt in recent years, especially since the global financial crisis. With so much at stake, the era of U.S. dollar hegemony seems to be ending. China has been raking in profits from its biggest export market, the U.S., by keeping its yuan, also known as the renminbi, undervalued. China has also been purchasing U.S. treasury bonds to add to its foreign reserves, worth more than $2 trillion. In September, the U.S. House of Representatives passed the Currency Reform for Fair Trade Act with a vote of 348 to 79. Under the bill, the U.S. is allowed to slap tariffs on goods from China and other countries with currencies that are perceived to be undervalued. Basically, the U.S. is pushing China to allow the yuan to appreciate. “For so many years, we have watched the China-U.S. trade deficit grow and grow and grow,” House Speaker Nancy Pelosi said on the day of the vote, which was on Sept. 29 local time. “Today, we are finally doing something about it by recognizing that China’s manipulation of the currency represents a subsidy for Chinese exports coming to the United States and elsewhere.” But China does not want the value of its currency to increase because a stronger yuan will hurt Chinese exporters who will see a decline in exports to the U.S. once the currency’s value rises.

Mattis and Gary Cohn had several quiet conversations about The Big Problem: The president did not understand the importance of allies overseas, the value of diplomacy or the relationship between the military, the economy and intelligence partnerships with foreign governments. They met for lunch at the Pentagon to develop an action plan. One cause of the problem was the president’s fervent belief that annual trade deficits of about $500 billion harmed the American economy. He was on a crusade to impose tariffs and quotas despite Cohn’s best efforts to educate him about the benefits of free trade. How could they convince and, in their frank view, educate the president? Cohn and Mattis realized they were nowhere close to persuading him. The Groundhog Day–like meetings on trade continued and the acrimony only grew. “Let’s get him over here to the Tank,” Mattis proposed. The Tank is the Pentagon’s secure meeting room for the Joint Chiefs of Staff. It might focus him. “Great idea,” Cohn said. “Let’s get him out of the White House.” No press; no TVs; no Madeleine Westerhout, Trump’s personal secretary, who worked within shouting distance of the Oval Office. There wouldn’t even be any looking out the window, because there were no windows in the Tank. Getting Trump out of his natural environment could do the trick. The idea was straight from the corporate playbook—a retreat or off-site meeting. They would get Trump to the Tank with his key national security and economic team to discuss worldwide strategic relations. Mattis and Cohn agreed. Together they would fight Trump on this. Trade wars or disruptions in the global markets could savage and undermine the precarious stability in the world. The threat could spill over to the military and intelligence community. Mattis couldn’t understand why the U.S. would want to pick a fight with allies, whether it was NATO, or friends in the Middle East, or Japan—or particularly with South Korea.

When a country’s economy is in trouble—when it has a balance of trade deficit, for instance, and when its debts are mounting—and when the currency, therefore, is declining in value because everybody can see that the economy is bad, politicians, throughout history, have found a way of making things worse with the imposition of exchange controls. They run to the press and they say, “Listen, all you God-fearing Americans, Germans, Russians, whatever you are, we have a temporary problem in the financial market and it is caused by these evil speculators who are driving down the value of our currency—there is nothing wrong with our currency, we are a strong country with a sound economy, and if it were not for these speculators everything would be OK.” Diverting attention away from the real cause of the problem, which is their own mismanagement of the economy, politicians look to three crowds of people to blame for the regrettable situation. After the speculators come bankers and foreigners. Nobody likes bankers anyway, not even in good times; in bad times, everybody likes them less, because everybody sees them as rich and growing richer off the bad turn of events. Foreigners as a target are equally safe, because foreigners cannot vote. They do not have a say-so in national affairs, and remember, their food smells bad. Politicians will even blame journalists: if reporters did not write about our tanking economy, our economy would not be tanking. So we are going to enact this temporary measure, they say. To stem the scourge of a declining currency, we are going to make it impossible, or at least difficult, for people to take their money out of the country—it will not affect most of you because you do not travel or otherwise spend cash overseas. (See Chapter 9 and the Bernanke delusion.) Then they introduce serious exchange controls. They are always “temporary,” yet they always go on for years and years. Like anything else spawned by the government, once they are in place, a bureaucracy grows up around them. A constituency now arises whose sole purpose is to defend exchange controls and thereby assure their longevity. And they are always disastrous for a country. The free flow of capital stops. Money is trapped inside your country. And the country stops being as competitive as it once was.

All of us sit here at this conference and feel secure in our belief that we live in an era beyond this kind of…authoritarian regime change; but what sort of political climate do you think could potentially break apart our current stasis and deliver us back in time, so to speak? Thank you, I am gratified there has been so much interest in our little project. Gilead Studies languished for many years, I suppose those who had lived through those times did not want them resurrected for various reasons including what might have been done to them and what they themselves might have done. But at this distance, we can allow ourselves some perspective. It’s fortunate that is the last question as my voice is giving out. As to your question, in times of peace and plenty, it is hard to remember the conditions that have led to authoritarian regime changes in the past. And it is even harder to suppose that we ourselves would ever make such choices or allow them to be made. But when there is a perfect storm and collapse of the established order is in the works precipitated by environmental stresses that lead to food shortages, economic factors such as unrest due to unemployment, a social structure that is top heavy with too much wealth being concentrated among too few, then scapegoats are sought and blamed, fear is rampant, and there is pressure to trade what we think of as liberty for what we think of as safety. And, when the birth rate of any society is low enough to create an aging shrinking population, then commercial and military authorities will become alarmed. Their customer base and their recruitment base will be in jeopardy and there will be extreme pressure on women of childbearing age to make up the population deficit, thus our handmaid and her tale.

The markets in the long run are no doubt driven by fundamental economic laws—if the United States runs a persistent trade deficit, the dollar will eventually plummet—but in the short run money flows less rationally. Fear and, to a lesser extent, greed are what make money move.

According to the Pew study, our collective list of concerns goes like this: the economy, jobs, terrorism, Social Security, education, energy, Medicare, health care, deficit reduction, health insurance, helping the poor, crime, moral decline, the military, tax cuts, environment, immigration lobbyists, trade policy, and global warming, in that order.

Discussions about the System tend to use very abstract phrases such as "balance-o f-payments deficit," "trade balance," "current account," "J-curve," and "liquidity." When I was an active member of the Editorial Board of The New York Times, and agitated about the problems of the System, there was a copy editor who would always sigh deeply when my grave opinion arrived, and he would say, "What's liquidity? Nobody knows what liquidity is." I would say, "The ability to turn assets into cash, and from that, an ample supply of money, the degree of money and near -money around," to which the reply would be, "What's a one-word synonym for liquidity?" I never found a one-word synonym; if any reader has it I would be grateful for it; and the word liquidity itself never made it through.

The obsession with control was an overarching flaw in the U.S. occupation, from start to finish. In any postconflict international intervention, there is always a certain tension between legitimacy and control. Because it started with such gaping legitimacy deficits within Iraq and internationally, the American-led occupation needed to be especially sensitive to this problem, which could only have been overcome by either surrendering a good measure of control to a more collaborative structure, or by rapid and decisive progress to reconstruct the country and hand it fully back to Iraqis. Such a rapid transformation was not in the cards; the situation was too intractable, and the United States, in any case, lacked the wisdom and was unwilling to commit the resources to bring it off. Still, for most of the first year of occupation, the American administration opted for control over legitimacy whenever the trade-off presented itself.

Countries competing against one another in the same array of products and services is not covered by Ricardian trade theory.   Offshoring doesn’t fit the Ricardian or the competitive idea of free trade. In fact, offshoring is not trade.   Offshoring is the practice of a firm relocating its production of goods or services for its home market to a foreign country. When an American firm moves production offshore, US GDP declines by the amount of the offshored production, and foreign GDP increases by that amount. Employment and consumer income decline in the US and rise abroad. The US tax base shrinks, resulting in reductions in public services or in higher taxes or a switch from tax finance to bond finance and higher debt service cost.   When the offshored production comes back to the US to be marketed, the US trade deficit increases dollar for dollar. The trade deficit is financed by turning over to foreigners US assets and their future income streams. Profits, dividends, interest, capital gains, rents, and tolls from leased toll roads now flow from American pockets to foreign pockets, thus worsening the current account deficit as well.   Who benefits from these income losses suffered by Americans? Clearly, the beneficiary is the foreign country to which the production is moved. The other prominent beneficiaries are the shareholders and the executives of the companies that offshore production. The lower labor costs raise profits, the share price, and the “performance bonuses” of corporate management.   Offshoring’s proponents claim that the lost incomes from job losses are offset by benefits to consumers from lower prices. Allegedly, the harm done to those who lose their jobs is more than offset by the benefit consumers in general get from the alleged lower prices. Yet, proponents are unable to cite studies that support this claim. The claim is based on the unexamined assumption that offshoring is free trade and, thereby, mutually beneficial.   Proponents of jobs offshoring also claim that the Americans who are left unemployed soon find equal or better jobs. This claim is based on the assumption that the demand for labor ensures full employment, and that people whose jobs have been moved abroad can be retrained for new jobs that are equal to or better than the jobs that were lost.   This claim is false.

The Commerce Department said the trade deficit jumped 43.1 percent to $51.4 billion in March, the largest since October 2008. The percent rise was the biggest since December 1996.

Exports to China increased 13.6 percent, while imports from that country jumped 31.6 percent. That left the politically sensitive U.S.-China trade deficit at $31.2 billion, up 38.6 percent from February. The U.S. trade deficit with Japan was the largest in two years. (Reporting by

In 1993, the year Clinton became President, median household income in the United States was $48,884. Six years later, it was $56,080, and the federal government ran a $125.6-billion surplus. There was an even bigger surplus in 2000, and ever since 2001 the federal government has been in the red. In 2013, median household income was $51,939, and the budget deficit was $680 billion (which was small by post-Clinton standards). The stock market began the nineteen-nineties with the Dow at 2,753. At the end of trading in 1999, the Dow was at 11,497.

Today, the U.S. has lost one out of every four manufacturing jobs that existed before NAFTA—over 5 million, with 42,000 factories closed. A modest trade surplus with Mexico was replaced with a large, persistent deficit. . . . NAFTA’s new investor protections dramatically increased the ability of corporations to outsource entire factories to Mexico”—resulting in the “giant sucking sound” presidential candidate Ross Perot warned us about.

The worry is that Uncle Sam could lose access to affordable financing if China refuses to keep buying Treasuries. There are a number of problems with this thinking. For one thing, China can’t avoid holding dollar assets without wiping out its trade surplus with the United States. That’s not something China wants to do, since shrinking its exports to the US would tend to slow its economic growth. Assuming it wants to keep its trade surplus intact, it’s going to end up holding dollar assets. As financial commentator and former investment banker Edward Harrison put it, “the only question for China is which dollar assets [green dollars or yellow dollars] it will buy, not whether it will go on a US dollar strike.

MYTH #5: The trade deficit means America is losing. REALITY: America’s trade deficit is its “stuff” surplus.

Having won the election in 2016, Trump has continued to stick with the message that the US is locked in a losing competition when it comes to trade. Even some of his presumptive opponents echoed those sentiments. Senator Bernie Sanders, for example, has tweeted: “It’s wrong to pretend that China isn’t one of our major economic competitors. When we are in the White House we will win that competition by fixing our trade policies.” Certainly, Sanders aimed (and still aims) to fix trade policy by protecting workers and the environment. Yet there is a tinge of anxiety that progressives share with conservatives: fear of the trade deficit itself.

The truth is, a trade deficit is not in and of itself something to fear. America doesn’t need to zero out its trade deficit to protect jobs and rebuild communities. As long as the federal government stands ready to use its fiscal capacity to maintain full employment at home, there is no reason to resort to a trade war. Instead, we can envision a new world trade order that works better, not for corporations seeking to exploit cheap labor and escape regulations, but for millions of workers who’ve received such a raw deal under previous “free trade” policies in the post-NAFTA era. Reenvisioning trade also can lead to better policies for developing countries and for the global environment.

Page 10-11: Because of America's vigorous growth, and because the dollar plays a special role in the international economy, foreigners have been willing to finance the nation's imports and consumption. The bad news is that America's trade and investment deficits with the rest of the world (i.e., the amounts by which it is spending more than it is producing and borrowing more than it is lending) are growing so fast that they threaten to place the United States in the position of Thailand in 1997. That is to say, America's debts to the rest of the world may soon become large enough that its creditors could start wondering about the nation's ability to repay. Should foreigners lose faith in America's creditworthiness, they may start dumping dollars the way they dumped Thai baht. In that case, the American consumer would face significant belt-tightening to enable to country to start paying the debt down. Alternatively, the Federal Reserve could raise interest rates very high. This step would aim at persuading foreigners to keep up their lending by offering them higher rates of return on their loans, but it would also slow down the domestic economy by making the cost of money much more expensive for businesses and consumers. It would also add greatly to the total debt that would have to be repaid. ... A significant U.S. slowdown, therefore, would most likely leave the Japanese and Europeans (plus the Chinese and the rest of Asia and Latin America) with ever greater stockpiles of goods that no one could or would buy. These products would either languish on the shelf, or global price wars would break out, with each country trying to undercut the other in a frantic attempt to trim losses. Nations would either offer their goods for sale for much less than their production costs, or they would devalue their currencies, making them cheaper relative to other currencies. Thus their goods would automatically sell for less in foreign markets, and foreign goods would automatically become more expensive in their market.

Marty Feldstein, who explained clearly how America’s trade deficit came about. He said: “foreign import barriers and exports subsidies are not the reason for the US trade deficit… the real reason is that Americans are spending more than they produce…

At the end of 2006, the United States was spending more for what it bought overseas than it sold, resulting in a record trade deficit of $902 billion. That meant that for every dollar generated by the American economy about seven cents was leaving the country, worsening America’s status as the world’s most indebted nation. Just a generation ago we were the world’s leading creditor nation. As Warren Buffett calculates it, America is selling close to 2 percent of its wealth each year to sustain our appetite for imported oil and cheap manufactured goods, many of them mere trinkets.

We Do Not Have a Trade Deficit. We have a capital surplus. ... Trade deficits are partly a question of consumer preference — American consumers really do like Hondas more than Japanese consumers like Buicks — but they are not mainly a question of consumer preference. They are mainly a question of investor preference — and investors prefer the United States, which is why there is almost twice as much foreign direct investment in the United States as in China, even though China’s economy has grown at a much faster rate over the past 20 years. ... Trade deficits don’t happen because the wily Japanese juke us on trade policy. They happen because intelligent people holding a fistful of dollars very often decide to forgo the consumption of American consumer goods in order to invest in American assets. In economics terms, what this means is that the trade deficit is a mirror image of the capital surplus. ... The trade deficit might remain unchanged, but there would be a large cost attached: Without that foreign investment capital flowing into the United States, money gets more expensive. That means entrepreneurs have a harder time raising capital. ... One of the problems, I suspect, is that people hear the word “deficit” and they think of the trade deficit as being like the budget deficit, i.e. a mounting debt that one day will have to be paid. It is something closer to the opposite: We get more stuff in return for the stuff we sell, and we get cheap investment capital on top of that. Foreigners get access to a dynamic economy with a stable government (miraculously stable, considering the jackasses in charge of it) and a stable currency. Everybody benefits.

The year Reagan was sworn into office, 1981, the United States was the largest importer of raw materials in the world and the world's largest exporter of finished, manufactured goods. ... Today, things are totally reversed: We are now the world's mining pit, the largest exporter of raw materials, and the world's largest importer of finished, manufactured goods. This has resulted in an enormous trade imbalance, one that has grown from a modest $15 billion deficit in 1981 to an enormous $539 billion deficit by 2012.

A good part of the state’s assets were privatized, including electric power distribution, banks, and telecommunications. The country lacks a national currency, having shifted from the colón to the U.S. dollar in 2001. The country’s main export is people, who travel to and remain in the United States and other countries and send back remittances, which constitute one of the largest contributions to the nation’s GDP; drug money-laundering may bring in more than remittances, but nobody knows for sure. A sizable proportion of economically viable enterprises are now owned wholly or partially by multinational corporations, including the important banks, all communications (mobile phones and internet), beer, petroleum derivatives, and airlines. The country imports a lot of what it consumes, especially foodstuffs, energy, and health products, which is reflected in a chronic trade deficit that would be unsustainable were it not for remittances.

China-centric globalization is characterized by three features: (1) The emergence of China as the global center of manufacturing—the so-called “factory for the world”; (2) The creation of a new dollar zone shared by the U.S. and China, and supported by China’s adoption of a pegged dollar exchange rate; and (3) The emergence of a massive U.S. trade deficit with China, combined with the transfer of a significant chunk of U.S. manufacturing capacity there.

The United States is in deficit on raw materials account, but is unwilling to limit its industrial expansion correspondingly. It is in surplus on farm products account, but is unwilling to limit its agriculture accordingly. The peoples of developing countries therefore are to be turned into the instrument through which the otherwise untenable U.S. economic process is perpetuated.

Whether people realize it or not, “classic” American conservatism—with its emphasis on small government, balanced budgets, free trade, and the innovative firepower of the free enterprise system—has become an anachronism since the rise of Donald Trump as a political force. As he emerged as the leader of the “conservative” party, he advocated enormous increases in government spending, producing huge budget deficits; promised trade protectionism; and worked to close borders to immigrants. What conservatism means today has, in a sense, gone back to the future. William Jennings Bryan—a turn-of-the-twentieth-century Democrat—would be happier than either Barry Goldwater or Ronald Reagan with the sort of agenda now put forward by the Republican Party.

Thirdly, German bankers drooled over the large difference between the interest rate they could charge to German customers and the going interest rate in places like Greece. The chasm between the two was a direct repercussion of the trade imbalances. A large trade surplus means that cars and washing machines flow from the surplus to the deficit country, with cash flowing the opposite way. The surplus country becomes awash with “liquidity,” with cash accumulating in proportion to the net exports pouring into its trading partners. As the supply of cash increases within the surplus nation’s banks, in Frankfurt to be precise, it becomes more readily available and therefore cheaper to borrow. In other words, its price drops. And what is the price of money? The interest rate! Thus interest rates in Germany were remaining much lower than in Greece, Spain and their equivalents, where the outflow of cash (as the Greeks and the Spanish purchased more and more Volkswagens) maintained the price of euros in Europe’s south above its equivalent in Germany.3

And so it was that politicians used to quibbling over a few million euros to be spent on pensioners, health or education gave their governments carte blanche to transfer hundreds of billions to bankers hitherto awash with liquidity. “Solidarity with bankers” helped Germany’s and France’s banks survive the collapse of their foolish derivative trades. However, another calamity beckoned: the remaining loans that bankers, like Franz, had granted to the deficit regions of the eurozone were sizeable enough to bankrupt those nations if stressed Irish, Spanish, Greek banks were to default. Before the ink of their own bailout agreements had dried, a second bank bailout was in progress: a bailout for the bankers of deficit countries whose governments could not afford to rescue them.

Given the gulf between the excellence of Italian design, educated by the beauties of the past, and the unremitting tastelessness of British modernity, it is not a coincidence that Italy has one of the largest trading surpluses of any nation, while Britain has one of the largest deficits.

For much of the 18th century, the East India Company was forced to ship boatloads of silver to China rather than manufactured goods, resulting in a deficit in trade and a strain on the economy. The East India Company, which had its own naval and military force, was also in debt from wars being fought to control trade in India. To stop this debt from increasing, the East India Company, which still had a monopoly on trade in the region, began smuggling opium into Guangzhou (opium had been illegal in China since 1729). By 1793, the East India Company had created a monopoly on the purchase of opium in Bengal, India, thereby cutting out the Bengali merchants from the trade. The opium produced in Bengal was then sold in Calcutta

It’s not so much that a strong or weak currency is inherently good or bad per se, but rather that an artificially strong or weak currency relative to a country’s trade balance is bad. If a country has a persistent trade surplus but constantly weakens its otherwise-appreciating currency by accumulating central bank reserves (mercantilism), then value is siphoned away from workers and toward the leaders. Similarly, if a country has a persistent trade deficit but has an extra monetary premium built onto its otherwise-depreciating currency due to its imperial prowess, then its workers are not very competitive in terms of global labor rates and will likely stagnate, while their political leaders, multinational corporations, and wealthy elite will thrive.

senator decided that he didn’t want to be the bad guy in the story. He spent Saturday huddling with West, sketching out a fresh offer for a climate bill, assembling a compromise he deemed worthy. When West passed along the document to Petrella and Deese, he told them that some fine-tuning might be required, but he thought it was a fair deal that Schumer and the White House could accept. As Petrella scanned the offer, he braced himself for the worst. But as he read, he absorbed the reality that Manchin had confounded his expectations. The plan was actually ambitious, not that far from the substance of their negotiations. Manchin had his demands, to be sure. They had covered most of this ground before. He wanted approval of the Mountain Valley Pipeline, which would transport natural gas from wells in north-central West Virginia, turning his state into a major player in that energy market. He asked for the Democratic leadership’s support for a separate bill reforming the process for permitting new energy infrastructure so that it could be built without having to surmount so many bureaucratic impediments. And he needed hundreds of millions of dollars set aside for deficit reduction, to assuage his centrist conscience. But that was just horse trading. The only thing that truly mattered was his proposing more than $300 billion in tax credits that would incentivize the nation to rapidly embrace clean energy. If Congress passed his proposal, carbon emissions would fall by 40 percent of the 2005 levels by 2030. Petrella, who felt at once elated and frustrated by Manchin’s wild swings, told West, “Lance, I’ve been sticking my neck out, defending you guys, saying that you were going to fucking do something here, for a year. I’m willing to do it one more time, but it’s got to be before the August recess, and this has got to be it. This is the deal. We’re locking arms.” West told Petrella that the document in his hands was the “flight plan.” They were going to finally land the plane. —

The return by Biden to policies of perpetual war, high taxes, trade and energy deficits, enmeshment in the New World Order or what is now being called the Great Reset, are all policies that advance the interests of the unelected government in collusion with select corporations and this, dear reader, represents the very essence of fascism.

In fact, the Bretton Woods agreements are the single most important factor behind the Japanese and Korean miracles, the European Economic Community and its successor the European Union, the rise of China… and the statistical monster that is the U.S. trade deficit.

Page 61-2 ... Rome expanded rapidly ... and became master over the entire Mediterranean Basin. It then had unlimited resources in terms of land, money, and slaves. It collected taxes or tribute throughout its empire and was able to transfer to the central capital massive quantities of foodstuffs and manufactured items. The peasants and the artisans of Italy saw their economic base disappear as this Mediterranean economy was "globalized" by the political domination of Rome. The society was polarized between, on the one hand, a mass of economically useless plebeians and, on the other, a predatory plutocracy. A minority gorged with wealth oversaw the remaining proletarianized population. The middle-classes collapsed, a process that brought about the end of the republic and the beginning of the political form known as "empire" in conformity with the observations made by Aristotle about the importance of intermediate social classes for the stability of political systems. Since one could not eliminate the plebeians, intractable but geographically central as they were, they came to be nourished and distracted at the empire's expense with "bread and circuses." Page 64-5: The positive American trade balance, when only "advanced technology" is counted, dropped from 35 billion dollars in 1990 to 5 billion in 2001 and had disappeared entirely to become one more element in the overall trade deficit in January 2002. This fall in economic strength is not compensated for by the activities of American-based multinationals. Since 1998 the profits that they bring back into the country amount to less than what foreign companies that have set up shop in the United States are taking back to their own countries. Page 68: In conformity with classical economic theory, the general opening up of commercial exchange has brought about an increase in inequality throughout the world. This general exchange tends to introduce into each country the same disparities in revenue that exist at the level of the whole planet. ... The compression of worker revenues caused by free trade revives the traditional dilemma of capitalism that has now spread across the globe: low salaries do not allow for the absorption of increases in production. Page 17: In developed countries a new class is emerging that comprises roughly 20 percent of the population in terms of sheer numbers but controls about half of each nation's wealth. This new class has more and more trouble putting up with the constraint of universal suffrage.

As a self-proclaimed human rights activist, Hochschild can be forgiven for his economic illiteracy. But since it is the keystone that begins his tale, it is another fib worth correcting. The EIC’s large trade surplus (more physical goods going out than coming in) was because virtually none of the revenue from the goods sold in Europe was sent back to pay for labor, which was “paid for” as a fulfillment of the EIC labor obligation. Instead, the revenue paid for European administration, infrastructure, and trade services in the Congo as well as profits that were parked in Belgium (an overall payments deficit). For Hochschild to claim that Africans were getting “little or nothing” for the goods they produced because fewer goods were being sent to Africa displays a stunning economic ignorance. It is like saying that the empty container ships returning to China from today’s port of Long Beach show that China’s workers are being paid “little or nothing.

ECONOMIC IMPACT - The United States buys almost three quarters of a trillion dollars ($738,000,000,000.00) more from overseas suppliers than it sells in exports (balance of trade deficit). Overall, the US buys about $ 2.5 trillion dollars in goods and services produced by the other nations of the world every year. With the United States gone as the world’s economic engine, the remaining nations of the world will, in varying degrees, immediately suffer from staggering financial depression. The financial credit crisis that started in mid-September, 2008 in the United States, soon reverberated in stock markets across the world.

Through America’s ports and harbors flow billions of dollars of products made by others, and sold in America for consumption by Americans. In 2007 the trade deficit was $712 Billion dollars. That’s almost three-quarters of a Trillion dollars. Of the total U.S. international waterborne trade, the United States imports approximately 76 percent of value of its total trade, and exports 24 percent.

Trade liberalization has created other problems, too. It has increased the pressures on government budgets, as it reduced tariff revenues. This has been a particularly serious problem for the poorer countries. Because they lack tax collection capabilities and because tariffs are the easiest tax to collect, they rely heavily on tariffs (which sometimes account for over 50% of total government revenue).7 As a result, the fiscal adjustment that has had to be made following large-scale trade liberalization has been huge in many developing countries – even a recent IMF study shows that, in low-income countries that have limited abilities to collect other taxes, less than 30% of the revenue lost due to trade liberalization over the last 25 years has been made up by other taxes.8 Moreover, lower levels of business activity and higher unemployment resulting from trade liberalization have also reduced income tax revenue.When countries were already under considerable pressure from the IMF to reduce their budget deficits, falling revenue meant severe cuts in spending, often eating into vital areas like education, health and physical infrastructure, damaging long-term growth. It

Ten months after Jamie’s death, the 2006 football season began. The Colts played peerless football, winning their first nine games, and finishing the year 12–4. They won their first play-off game, and then beat the Baltimore Ravens for the divisional title. At that point, they were one step away from the Super Bowl, playing for the conference championship—the game that Dungy had lost eight times before. The matchup occurred on January 21, 2007, against the New England Patriots, the same team that had snuffed out the Colts’ Super Bowl aspirations twice. The Colts started the game strong, but before the first half ended, they began falling apart. Players were afraid of making mistakes or so eager to get past the final Super Bowl hurdle that they lost track of where they were supposed to be focusing. They stopped relying on their habits and started thinking too much. Sloppy tackling led to turnovers. One of Peyton Manning’s passes was intercepted and returned for a touchdown. Their opponents, the Patriots, pulled ahead 21 to 3. No team in the history of the NFL had ever overcome so big a deficit in a conference championship. Dungy’s team, once again, was going to lose.3.36 At halftime, the team filed into the locker room, and Dungy asked everyone to gather around. The noise from the stadium filtered through the closed doors, but inside everyone was quiet. Dungy looked at his players. They had to believe, he said. “We faced this same situation—against this same team—in 2003,” Dungy told them. In that game, they had come within one yard of winning. One yard. “Get your sword ready because this time we’re going to win. This is our game. It’s our time.”3.37 The Colts came out in the second half and started playing as they had in every preceding game. They stayed focused on their cues and habits. They carefully executed the plays they had spent the past five years practicing until they had become automatic. Their offense, on the opening drive, ground out seventy-six yards over fourteen plays and scored a touchdown. Then, three minutes after taking the next possession, they scored again. As the fourth quarter wound down, the teams traded points. Dungy’s Colts tied the game, but never managed to pull ahead. With 3:49 left in the game, the Patriots scored, putting Dungy’s players at a three-point disadvantage, 34 to 31. The Colts got the ball and began driving down the field. They moved seventy yards in nineteen seconds, and crossed into the end zone. For the first time, the Colts had the lead, 38 to 34. There were now sixty seconds left on the clock. If Dungy’s team could stop the Patriots from scoring a touchdown, the Colts would win. Sixty seconds is an eternity in football.

If you want our trade deficit to go down, we can make that happen. Let’s just blow up the economy!

If a country consumers more than it produces, it must import more than it exports. That's not a rip-off that's arithmetic. If we manage to negotiate a reduction in the Chinese trade surplus with the United States, we will have increased trade deficits with some other country. Federal deficit spending, a massive and continuing act of dissavings, is the culprit. Control that spending and you will control the trade deficit.

but we are still vulnerable to the vagaries of the global economic turbulence because of an excess of imports and reduced exports, leading to trade deficit, increased current account deficit—which leads to inflation—and the depreciation of the rupee to 60.49 per US dollar in June 2013.

Mac has attention deficit disorder, and like many people with the affliction, he gets calm and laser focused in high-stress situations. That’s why he’s drawn to trading and EMT work.