Annual trade deficits are always economically detrimental

Annual trade deficits are always economically detrimental

Postby Supposn » Sat Jul 28, 2018 8:01 pm

They indicate the nation has consumed more products than it has produced and occurs when imports have “crowded out” too much of the nation's domestic products from the nations domestic marketplaces. This in turn drags upon the trade deficit nation's numbers of jobs.

The amount of a nation's net trade balance only account for the prices of globally traded products' effects upon their nation's GDP, but the products' prices do not reflect the entire commercial activity their production has generated for the producing-nation or the nonexistent commercial activity that did not occur within the importing nation.
We know that an enterprise's additional commercial activity can “resonate” with other seemingly less related enterprises and consequentially increase their nation's domestic production. Production support for products to be exported are often such resonating contributions to their nation's domestic production.

We know universities, utility companies and government agencies seeking to promote their local economies do as a public service provide some local producer with goods, services, or other considerations at lesser than market, or at no costs. These production supporting goods and service products are themselves seldom globally traded products and their contributions to their nations' GDPs are thus not recognized as due to their nation's global trade.

To the extent the nation's balance of trade surplus increases or trade deficit reduces the nation's domestic production, it also increases or reduces the nation's economies of scale and effects per unit costs of goods or service products sold within domestic and/or global markets.
Beyond the economic benefits of increasing their nations commercial activity and numbers of jobs, increasing domestic production often provides social, technical, and military benefits to their nation.

By manipulating the materials, methods, and materials of production, we gain familiarity, knowledge, and insight into production. Much of our economies' progress was due to research and development induced by USA's defense purchases. If our military has need for something fast, will it be delayed because a foreign government doesn't agree with our then current policy? What of military security for foreign-produced equipment?

Respectfully, Supposn
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