Reduce the trade deficit; increase GDP, jobs and median wage

Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Thu May 05, 2016 8:29 am

Trade deficit’s effect upon GDP.
.
John Galt, a proportionally small minority of creditable economist argue that USA’s annual trade deficits are not net detrimental to our GDP. I’ll leave their positions based upon illogical statistical correlations to be discussed within another post.

The most commonly used conventional method for defining GDP is the expenditure formula which is:
[ GDP = consumption + investment + government spending (+ or -) (balance of global trade) ].

Balances of trade usually, (if not always) are proportionally the smallest of USA’s annual GDPs’ four major components. USA is continuing to CONSISTENTLY experience annual trade deficits of goods that began more than a half century ago.
Trade surpluses boost and deficits drag upon their nation’s GDPs.
Trade deficits drag upon their nation’s production are reflected by its drags upon the nation’s numbers of jobs, payroll amounts and wage-rates. Trade deficits also boost foreign investments into their nation’s entities.

Within this post I’m discussing those creditable economists’ that have concluded trade deficits do not contribute to the improvement of their nation’s GDPs. Some of those economists contend that trade deficits boost of foreign investments almost or entirely cover the trade deficit’s drag upon their nations’ employees and enterprises income revenues. I contend but cannot confirm that the majority of creditable economists believe otherwise.

Only the prices of globally traded products can be attributed to global trade. Production of supporting goods and services that are not fully charged to globally the producers are attributed to the producing nation’s GDP but they cannot be identified and attributed to their nation’s global trade. Thus balances of trade and the effects upon their nations’ GDPs are to some extent generally understated.
Refer to the paragraphs “Trade balances affects upon their economies” within the Wikipedia article “Balance of trade” for a further explanation of trade balances’ understated “ripple” effects upon their nation’s GDPs.

Investments from foreign rather than USA sources are not of superior benefit to our nation. It’s preferable that we attract more investment from any foreign and/or domestic sources due to our superior economic performances rather than gaining additional foreign investment due to our trade deficit which is a net drag upon our GDP.

I’m among the proponents of a specific unilateral Import Certificate policy. It would almost entirely eliminate USA’s chronic annual trade deficits of goods, serve as an indirect but effective subsidizer of USA’s exported goods and is substantially market rather than government driven.
Refer to
or google Wikipedia’s “Import Certificates” article.

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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Thu May 05, 2016 8:41 am

Statistical "proof" of trade deficits relationship to their nation’s GDP?
.
John Galt, a proportionally small minority of creditable economist MAY argue that USA’s annual trade deficits are not net detrimental to our GDP. Their “proof” is based upon both trade deficits and their nation’s GDPs apparently increasing or decreasing simultaneously.
Increasing or decreasing GDP (per capita) indicates their nation’s improving or deteriorating economies. Trade deficits by definition are the values of the nation’s imports exceeding their exports.

When the nation’s economy is improving, why wouldn’t sales volumes within the nation’s domestic market places not generally be also increasing? Similarly when the economies doing poorly, why wouldn’t sales volumes of the nation’s market places similarly be reducing?

Sales volumes of Imported or domestically products within the same market places may or may not behave in similar manners. If the provided statistical “proofs” do not factor in differences that may exist between the foreign and USA products sold within USA’s market places, and additionally considers the foreign markets' for USA export products, it is not proof of trade deficits relationship to GDP.
The offered “proof” then actually only demonstrates (to the extent that imported and domestic goods MAY BE SIMILAR), sales volumes of foreign and USA products within the same USA market places behave in similar fashions.

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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Tue May 24, 2016 9:54 am

Josh wrote:
Supposn wrote:Josh, the first mention (that I’m aware of) regarding the proposed unilateral Import Certificate concept for a nation’s practice of global trade was co-authored by Warren Buffett and a Fortune magazine editor; In 2003 Fortune magazine published the article. I doubt Buffett has since refuted the concept.


Import certificates (einfuhrscheine/ausfuhrscheine) were commonly used as late as the 19th century in response to the initial struggling of agrarian capitalism in western europe. Their misuse by the Germany, UK, and Russia were a contributing factor to WWI. Related Read ...


Josh, you provided a link describing Nick Koning’s book, “The Failure of Agrarian Capitalism”. I finally obtained and browsed through his book. He discusses foreign trade relative to nations difficulties and efforts to deal with shortages of primarily agricultural goods during the First World War. Non-combating nations were concerned with increased prices within their own domestic markets and combating nations wanted to reduce their exports and increase their imports of such goods. Other than the book’s commenting upon a facet of global trade, the book’s and our treads discussing Import Certificates are unrelated to each other.

There’s little reason to suspect that a correlation between USA’s net global trade balance our GDP is (as John Galt would have us believe), due to the our annual trade deficits’ effects upon our GDPs; that’s similar to concluding the flea on the tail wags the entire dog.

It’s not unreasonable to deduce our domestic USA’s markets’ sales volumes affect both our production of domestic and our importation of goods. Additionally we can further deduce that importation of foreign products “crowd out” our domestic domestically products within our domestic markets and consequential reduce USA’s production of goods. Such reduction’s particularly detrimental to employees, their dependents and all other USA entities that are particularly net sensitive to detriments of USA wages and wage rates. These particular entities significantly affect USA's entire economy.

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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Tue May 24, 2016 9:55 am

Josh wrote:
Supposn wrote:Josh, the first mention (that I’m aware of) regarding the proposed unilateral Import Certificate concept for a nation’s practice of global trade was co-authored by Warren Buffett and a Fortune magazine editor; In 2003 Fortune magazine published the article. I doubt Buffett has since refuted the concept.


Import certificates (einfuhrscheine/ausfuhrscheine) were commonly used as late as the 19th century in response to the initial struggling of agrarian capitalism in western europe. Their misuse by the Germany, UK, and Russia were a contributing factor to WWI. Related Read ...


Josh, you provided a link describing Nick Koning’s book, “The Failure of Agrarian Capitalism”. I finally obtained and browsed through his book. He discusses foreign trade relative to nations difficulties and efforts to deal with shortages of primarily agricultural goods during the First World War. Non-combating nations were concerned with increased prices within their own domestic markets and combating nations wanted to reduce their exports and increase their imports of such goods. Other than the book’s commenting upon a facet of global trade, the book’s and our treads discussing Import Certificates are unrelated to each other.

There’s little reason to suspect that a correlation between USA’s net global trade balance our GDP is (as John Galt would have us believe), due to the our annual trade deficits’ effects upon our GDPs; that’s similar to concluding the flea on the tail wags the entire dog.

It’s not unreasonable to deduce our domestic USA’s markets’ sales volumes affect both our production of domestic and our importation of goods. Additionally we can further deduce that importation of foreign products “crowd out” our domestic domestically products within our domestic markets and consequential reduce USA’s production of goods. Such reduction’s particularly detrimental to employees, their dependents and all other USA entities that are particularly net sensitive to detriments of USA wages and wage rates. These particular entities significantly affect USA's entire economy.

Respectfully, Supposn
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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Tue May 24, 2016 9:56 am

Josh wrote:
Supposn wrote:Josh, the first mention (that I’m aware of) regarding the proposed unilateral Import Certificate concept for a nation’s practice of global trade was co-authored by Warren Buffett and a Fortune magazine editor; In 2003 Fortune magazine published the article. I doubt Buffett has since refuted the concept.


Import certificates (einfuhrscheine/ausfuhrscheine) were commonly used as late as the 19th century in response to the initial struggling of agrarian capitalism in western europe. Their misuse by the Germany, UK, and Russia were a contributing factor to WWI. Related Read ...


Josh, you provided a link describing Nick Koning’s book, “The Failure of Agrarian Capitalism”. I finally obtained and browsed through his book. He discusses foreign trade relative to nations difficulties and efforts to deal with shortages of primarily agricultural goods during the First World War. Non-combating nations were concerned with increased prices within their own domestic markets and combating nations wanted to reduce their exports and increase their imports of such goods. Other than the book’s commenting upon a facet of global trade, the book’s and our treads discussing Import Certificates are unrelated to each other.

There’s little reason to suspect that a correlation between USA’s net global trade balance our GDP is (as John Galt would have us believe), due to the our annual trade deficits’ effects upon our GDPs; that’s similar to concluding the flea on the tail wags the entire dog.

It’s not unreasonable to deduce our domestic USA’s markets’ sales volumes affect both our production of domestic and our importation of goods. Additionally we can further deduce that importation of foreign products “crowd out” our domestic domestically products within our domestic markets and consequential reduce USA’s production of goods. Such reduction’s particularly detrimental to employees, their dependents and all other USA entities that are particularly net sensitive to detriments of USA wages and wage rates. These particular entities significantly affect USA's entire economy.

Respectfully, Supposn
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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby spacemonkey » Wed May 25, 2016 11:12 am

Its a finite world with finite markets and resources. The illusion of perpetual growth will eventually be replaced by what can be sustained. Otherwise, our future don't look to bright. That's just the way things are when reality steps in because good intentions can go no further.
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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Wed May 25, 2016 2:12 pm

Supposn wrote:
Josh wrote:
Supposn wrote:Josh, the first mention (that I’m aware of) regarding the proposed unilateral Import Certificate concept for a nation’s practice of global trade was co-authored by Warren Buffett and a Fortune magazine editor; In 2003 Fortune magazine published the article. I doubt Buffett has since refuted the concept.


Import certificates (einfuhrscheine/ausfuhrscheine) were commonly used as late as the 19th century in response to the initial struggling of agrarian capitalism in western europe. Their misuse by the Germany, UK, and Russia were a contributing factor to WWI. Related Read ...


Josh, you provided a link describing Nick Koning’s book, “The Failure of Agrarian Capitalism”. I finally obtained and browsed through his book. He discusses foreign trade relative to nations difficulties and efforts to deal with shortages of primarily agricultural goods during the First World War. Non-combating nations were concerned with increased prices within their own domestic markets and combating nations wanted to reduce their exports and increase their imports of such goods. Other than the book’s commenting upon a facet of global trade, the book’s and our treads discussing Import Certificates are unrelated to each other. ...
... Respectfully, Supposn


Josh, I just took notice of your post’s last sentence; it’s not true.

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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Wed May 25, 2016 2:17 pm

spacemonkey wrote:Its a finite world with finite markets and resources. The illusion of perpetual growth will eventually be replaced by what can be sustained. Otherwise, our future don't look to bright. That's just the way things are when reality steps in because good intentions can go no further.


SpaceMonkey, USA’s markets are generally in flux. They’re in aggregate more changing rather than permanent. Why did you choose the word “finite” to describe USA’s aggregate domestic markets, and how does your post relate to USA’s net balances of global trade?

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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby spacemonkey » Thu May 26, 2016 11:46 am

Josh wrote:
spacemonkey wrote:Many people are just stupid and will continue to pay hundreds of dollars for tennis shoes and other crap made by child slave labor.


go read: Open World for facts that counter this generalization

Cheap and slave labor is a reality, and probably a future norm.
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Re: Reduce the trade deficit; increase GDP, jobs and median

Postby Supposn » Mon Jul 18, 2016 2:03 pm

I don’t recall when I became aware within Wikipedia’s “Balance of trade” article; the reference to trade balances’ affects upon their nations’ GDPs was deleted.
Apparently someone (lacking knowledge as to the accepted conventional methods for calculating our nation’s GDP), complained (what should have been accepted as an axiom), was not supported by citing references.

The obvious axiom was then restated and explicitly cited. So many people are more concerned over the citing or the reputation of the citer rather than explicit truths and accuracy.
Respectfully, Supposn
/////////////////////

Excerpted from Wikipedia’s “Balance of trade” article:
“Trade balances affects upon their nation's GDPs
Exports directly contribute and imports directly reduce their nation's
balance of trade, (i.e. net exports).
A trade surplus is positive net balance of trade and a trade deficit
is a negative net balance of trade.
Due to balance of trade being explicitly added to the calculation of
their nation's gross domestic product using the expenditure method of
calculating gross domestic production, (i.e. GDP), trade surpluses are
contributions and trade deficits are "drags" upon their nation's GDP”.
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