Originally Posted By: Tempest
Originally Posted By: pottymouth
Originally Posted By: Tempest
Quote:
I am astounded by the number of intelligent people who just don't get this basic concept.
What basic concept?
The basic concept that a country exporting its wealth in order to import largely useless consumer goods is headed for disaster.
Comparative advantage is completely nullified when you teach the other nation how to do what you do best, then pay them to do it for you. Eventually, you run out of money.
Interesting how we've had a trade deficit for 35 years and we haven't run out of money yet. You completely ignore the money that does comes into this country. And America is still the leading global producer of goods, we just do it with FEWER people.
Technology is the leading reason why we have fewer manufacturing jobs, not trade policy.
I take it that you want to tax products coming into this country so that people have less money to spend? How do you think that will affect the rest of the economy?
If you want to see how wealth REALLY is leaving the country, look here:
http://www.ustreas.gov/tic/mfh.txt
If you haven't run out of money, then explain the national debt and why its so large. Just because the government can print money and run a deficit, doesn't mean the coffers are full. This is in no way a criticism of the US (both my own country and province have had national and provincial debt, and both have and use deficit spending), only to point out that if you look at a graph illustrating the growth of national debt over time, and compare it to one showing the switch from manufacturing growth to service growth, you'll notice the graphs are oddly similar.
A country's national debt (compared to GDP or GNP to be taken into proper conyext) and recent trends is a better indicator of the overall 'health' of the country than trade deficits or deficit spending.
National debt is largely financed by other countries. Its the national equivalent to personal debt; and similarly, when you compare a countries national debt to its GDP or GNP, you are doing at the macro level the same thing finance companies do when they look at your annual income and your credit report to see how much debt you're carrying. The higher the ratio of debt to income, the more expensive it gets to borrow, and the more money paid to finance that debt (on a national, corporate, or personal basis, the consequence is the same: it is 'lost' money that exchanges hands with nothing tangible returned for it but credit that has to be repaid in addition to the finance charges).
The effect of this can be felt and measured using other indicators, such as the value of the dollar on the global market, the value of gold (this commodity increases in value as economic health takes a down turn), inflationary and employment figures, average and median income and where the wealth is concentrated, etc.
I'm not trying to stray off topic, and this is economics and not politics (economics is about facts, politics are opinion, and I'm not trying to keep politics out and focus on the economic issue that this thread has spread into). Anyone with a basic grasp of economics (which is all I have, having only done a couple courses in it during my undergrad days long ago) can find the relevant data and draw their own conclusions.
One source doesn't tell much. Many things need to be looked at to get a more accurate picture. But just as finance companies place a great deal of weight on your total debt to income ratio, national debt is not something to be tossed out the window or dismissed as irrelevant; were I buying stock or bonds, I'd be a pretty uninformed investor if I didn't try and gauge the health of the company by looking at its earnings to debt ratio and factoring that (heavily) into my decision process.
-Spyder
