The comment on BITOG that provided me great hope this week “turning rotors”.

Urshurak776 said:
So, I have always kind of stayed in the middle and tried to understand both sides of the coin. This is a tough one. I do understand, kind of big picture, what he is trying to do, but probably don't understand the meat and potatoes of it.

My biggest issue with the current Administration is that they forego the scalpel, and take out the chain saw. I think some diplomacy to push it in right direction for the country should be done. Come up with a plan and communicate with our trade partners. Be clear and firm, but I don't think we need a chainsaw.

That's just how I see it.
Click to expand...
We have done that for the last 5 decades, lots of talks, “negotiations” and a whole bunch of nothing in the end. Just how much more diplomacy do you expect?

This was quite clearly communicated and has been known for a long time. The request for the Canadian gov, which I’m most familiar with, was “secure your border from illegals and drug flow”. That’s it, pretty reasonable request IMO.
But the clown in charge over there decided to make a huge spectacle over this and of course took the opportunity to blame everything on the orange man.
Quite predictably it worked like a charm.
 
GON said:
I suppose borrowing money from Chinese peasants to buy products built by Chinese peasants is the way to pay back the monies borrowed from China and the like for their Chinese products. We only have so much U.S. farmland and the like to pay back China with.


  1. Trade deficits are not a simple accounting convention; they are real debt that must be paid back
  2. Trade deficits must be financed, and we finance our trade deficit by borrowing from our trading partners.
Click to expand...
Trade deficits can also be financed via capital invested in the U.S., and by a growing economy where there's more disposable income.

https://www.cato.org/publications/trade-balance-winning-trade#are-we-winning-trade
https://www.cato.org/blog/ignore-politicians-trade-deficits-dont-really-matter
https://taxfoundation.org/blog/trade-deficit-myths/
 
BMWTurboDzl said:
Trade deficits can also be financed via capital invested in the U.S., and by a growing economy where there's more disposable income.
Click to expand...
Yes, they can be financed. Been doing this for 40 years. The credit card is maxed out.

You can't generally finance yourself to prosperity. You eventually need to generate more income than cost. If not, you are known as a "zombie" in trading terms.
 
SC Maintenance said:
Yes, they can be financed. Been doing this for 40 years. The credit card is maxed out.

You can't generally finance yourself to prosperity. You eventually need to generate more income than cost. If not, you are known as a "zombie" in trading terms.
Click to expand...
Let me re-word this.

Trade deficits can be financed by foreigners who invest in the US.
 
BMWTurboDzl said:
Trade deficits can also be financed via capital invested in the U.S., and by a growing economy where there's more disposable income.

https://www.cato.org/publications/trade-balance-winning-trade#are-we-winning-trade
https://www.cato.org/blog/ignore-politicians-trade-deficits-dont-really-matter
https://taxfoundation.org/blog/trade-deficit-myths/
Click to expand...
Right, another lost point is I want the freedom to buy what I WANT to buy and not what the federal government is trying to force me to buy. Tariffs are fundamentally anti-Capitalist.
 
BMWTurboDzl said:
Let me re-word this.

Trade deficits can be financed by foreigners who invest in the US.
Click to expand...
Yes, I think that is the point. If foreign companies build something here, there bringing money here. Vs sending money somewhere else.

Eventually if they make profit they send money somewhere else, but they still employ people, buy things, and pay taxes here.

FDI is a good thing.
 
SC Maintenance said:
Yes, I think that is the point. If foreign companies build something here, there bringing money here. Vs sending money somewhere else.

Eventually if they make profit they send money somewhere else, but they still employ people, buy things, and pay taxes here.

FDI is a good thing.
Click to expand...
All while having a trade deficit. IOW..worrying about trade deficits is silly.
 
PWMDMD said:
Right, another lost point is I want the freedom to buy what I WANT to buy and not what the federal government is trying to force me to buy. Tariffs are fundamentally anti-Capitalist.
Click to expand...
True, but so are payroll taxes and social security? If you import something no payroll tax was made on the production of that good. Both are anti capitalist 🤷‍♂️
 
There is a whole lot to the administration's economic plan that isn't obvious. The first thing to know is that the US is in big fiscal trouble. We've gotten in way too deep with gov. spending and debt and in a decade there will be no options left other than default. Zip, zilch, nada. Then the wheels fall off and nobody knows exactly how that ends, but it's not good. Dogs living with cats. The end of days. Boys to Men reunion tour. You get the idea.

I think the president has multiple goals with the tariffs. One, make some revenue for the Treasury. Two, break down trade barriers for American exports. Three, force multinational corporations to onshore manufacturing. Four, and this is a super biggie, he's trying to crash bond yields for US treasuries by panicking the hedge fund crowd as a huge amount of Treasury debt is soon to mature. The lower those bond rates are, the less interest the US gov. has to pay on them.

While a lot of people are questioning the tariffs, Trump is swinging for the fence with this high risk strategy. He is desperately trying to avoid cuts in basic services and entitlements through a combined strategy of finding and cutting waste fraud and abuse, plus increasing economic growth through various means while decreasing the cost of the debt service. I really hope it works.
 
ripcord said:
There is a whole lot to the administration's economic plan that isn't obvious. The first thing to know is that the US is in big fiscal trouble. We've gotten in way too deep with gov. spending and debt and in a decade there will be no options left other than default. Zip, zilch, nada. Then the wheels fall off and nobody knows exactly how that ends, but it's not good. Dogs living with cats. The end of days. Boys to Men reunion tour. You get the idea.

I think the president has multiple goals with the tariffs. One, make some revenue for the Treasury. Two, break down trade barriers for American exports. Three, force multinational corporations to onshore manufacturing. Four, and this is a super biggie, he's trying to crash bond yields for US treasuries by panicking the hedge fund crowd as a huge amount of Treasury debt is soon to mature. The lower those bond rates are, the less interest the US gov. has to pay on them.

While a lot of people are questioning the tariffs, Trump is swinging for the fence with this high risk strategy. He is desperately trying to avoid cuts in basic services and entitlements through a combined strategy of finding and cutting waste fraud and abuse, plus increasing economic growth through various means while decreasing the cost of the debt service. I really hope it works.
Click to expand...
Remember tariffs are a backdoor national sales tax and revenue decreases with a decrease in spending on imported goods. Something like 2/3-3/4 of the budget is non-discretionary non-defense. He can never fill the gap with tariffs or "fraud mitigation". Multi-nationals are not going to invest hundreds of millions in the US when nothing he had done is permeant. Crashing bond yields will also impact pension funds and the Social Security General Fund. Then there's The Fed.
 
BMWTurboDzl said:
Remember tariffs are a backdoor national sales tax and revenue decreases with a decrease in spending on imported goods. Something like 2/3-3/4 of the budget is non-discretionary non-defense. He can never fill the gap with tariffs or "fraud mitigation". Multi-nationals are not going to invest hundreds of millions in the US when nothing he had done is permeant. Crashing bond yields will also impact pension funds and the Social Security General Fund. Then there's The Fed.
Click to expand...
It's almost like it's a rather complicated and intertwined issue that requires understanding and nuance and not a sledgehammer. Who'd a thunk it?
 
BMWTurboDzl said:
Remember tariffs are a backdoor national sales tax and revenue decreases with a decrease in spending on imported goods. Something like 2/3-3/4 of the budget is non-discretionary non-defense. He can never fill the gap with tariffs or "fraud mitigation". Multi-nationals are not going to invest hundreds of millions in the US when nothing he had done is permeant. Crashing bond yields will also impact pension funds and the Social Security General Fund. Then there's The Fed.
Click to expand...
What is the total spending by the U.S. government, and what is the deficit as a percentage of total spending? (These are not rhetorical questions - I'm trying to figure out if it's reasonable to balance the budget with cuts to the non-discretionary portion of government spending.)
 
PWMDMD said:
It's almost like it's a rather complicated and intertwined issue that requires understanding and nuance and not a sledgehammer. Who'd a thunk it?
Click to expand...
Meanwhile per the WSJ there's a record number of unfilled manufacturing jobs.

https://www.wsj.com/opinion/a-good-...bor-30255cce?mod=us-news_trendingnow_opn_pos3

"Forty percent of small business owners in March reported job openings they couldn’t fill, with larger shares in construction (56%), transportation (53%) and manufacturing (47%), according to last week’s National Federation of Independent Business survey. The Labor Department’s Job Openings and Labor Turnover Survey of businesses tells a similar story. There are twice as many job openings in manufacturing than in the mid-2000s as a share of employment. Save for during the pandemic, America’s worker shortage is the worst in 50 years."
 
Number_35 said:
What is the total spending by the U.S. government, and what is the deficit as a percentage of total spending? (These are not rhetorical questions - I'm trying to figure out if it's reasonable to balance the budget with cuts to the non-discretionary portion of government spending.)
Click to expand...
2023 (most recent)

$6.13T spent
$1.7T deficit

This will help with the budget numbers.
https://www.pgpf.org/article/chart-pack-the-us-budget/

$4.1T - Mandatory
$853B - Defense
$918B - Non-mandatory non-defense.
 
BMWTurboDzl said:
Remember tariffs are a backdoor national sales tax and revenue decreases with a decrease in spending on imported goods. Something like 2/3-3/4 of the budget is non-discretionary non-defense. He can never fill the gap with tariffs or "fraud mitigation". Multi-nationals are not going to invest hundreds of millions in the US when nothing he had done is permeant. Crashing bond yields will also impact pension funds and the Social Security General Fund. Then there's The Fed.
Click to expand...
The administration thinks they can find a trillion dollars a year of waste and fraud without touching entitlements. That leaves a trillion to cover via growth and import duties.
 
BMWTurboDzl said:
2023 (most recent)

$6.13T spent
$1.7T deficit

This will help with the budget numbers.
https://www.pgpf.org/article/chart-pack-the-us-budget/

$4.1T - Mandatory
$853B - Defense
$918B - Non-mandatory non-defense.
Click to expand...
Ouch! So cutting all non-mandatory non-defence spending would only go halfway to balancing the budget - and even cutting all discretionary spending would barely balance the budget.

That is scary.

Something needs to change.

Edit: So government revenue is about $4.4T.

If it's not realistic to significantly reduce government spending, then revenue must increase by over a third. That is scary.
 
You must log in or register to reply here.

Similar threads

dave1251
  • Locked
Exxon Mobil
Replies
19
Views
16K
MolaKule
buster
  • Locked
Great Article on GM/Daewoo Engineering
2
Replies
35
Views
13K
Willy_G
Back
Top Bottom