The Glade 4.0

Of course not, the US has a very large trade deficit. But some of the absolutist positions you are taking don't make sense when you compare them to the rest of the world.

In a previous post you say the US's trade deficit can only exist because the US government runs a lot of debt. But Germany, for example, has a massive trade surplus even though their government also runs huge debts. Furthermore, virtually every country except the oil exporters run huge massive public debts. Hell, China added like $1.5 trillion to their public debt in 2009 alone, which relative to GDP is more debt than the US added. The relationship between government debt and the health of the economy just isn't that clear. I really don't believe that if the US government passed, say, a balanced budget amendment tomorrow that all the economic problems the US has would magically fix themselves.

Maybe.

There would be large infusions of savings needed to recapitalize companies so they could become competitive. In the time we have been languishing, little companies people used to make fun of (Hyundai) have become large forces in the global economy.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

I never made such a contention. The US is taking on too much debt in order to maintain large trade deficits, not the other way around. GDP is not a good indicator of productive output of a region: consumption through use of credit does not make us more productive. So your contention that relative to their productivity, China ran greater deficits than the US, is teneuous at best. Not all debt is bad - capitalization is needed, oftentimes, to start ventures. But the market, under disciplined credit, best allocates this capital. Germany does not discount their deficits using accounting trickery or monetization because they are on the Euro. They must fund their deficits with tax revenues; significantly different strategy than discounting and glazing over deficits.

Of course the problems would fix themselves overnight. There'd be a lot of hardship and a lot of people who would be out of work in the transition - but it's ultimately their fault for voting people into office who promised them a goose that laid the golden egg, wanted to believe it, and mortgaged their soul to Satan for it. However, that's not reason not to solve the fundamental problems associated with how our economy is currently structured. Much to the chagrin of some board members, ultimately a profit is what motivates everyone - and that's how business works best. Profits have them strange association of drowning seagulls in oil and cutthroatingly starving the poor when some don't stop to think about the gainful, low-skill employment it creates, affordable products for the less wealthy and the security of available services.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

There's also the fact that some manufacturers have done very well manufacturing right here.

Of note, the most Canadian made vehicle on the roads in Canada is the Honda Civic.

Even with wage discrepencies, manufacturing elsewhere is not always cheaper. The Honda plant in Alliston, Ontario is one of the most efficient in North America. The workers there make good money (although they are not unionized), and Honda turns a profit. Honda builds the cars that it sells here domesticly.

Why don't they manufacture abroad and export? Well, they're driven by the bottom line, it must be cheaper to do it here. Maybe wages aren't the reason?

Maybe. Try to export a Canadian-made Civic to South Africa and see how much profit you make...there's a whole lot of layers of complexity, far more than any of us completely understand.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Yea, you're right. Wages aren't the sole contributor to production costs. What are two more reasons why manufacturing in the US is being discouraged?

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

I wasn't talking about solving the problems overnight, it's just that the US has other economic problems that aren't related to the public debt. Eliminating it would help but it wouldn't immediately turn the US from a doomed economy into a productive one.

Also, people don't hate profit, what people hate is profit that occurs without much apparent effort at the expense of the poor. That's why oil companies get so much ****. Gas prices rise faster than crude oil prices even though the refining costs are the same. They were making profit at the lower price, now they're charging more simply because they can. I recently read an article where they did a survey asking people the following question: "Do you think it is unethical to buy a good for no other reason than to attempt to re-sell it to someone else for a higher price?" Over 60% said yes. Lots of comments in support of this position too. You can see how it pisses people off. One guy who works at a copper smelting plant told a story about how some local bought truckloads of copper from them when it was like $0.75 a pound, then five years later when it was $3.50 a pound he brought it back and they were "forced" to buy their own copper back from him for four times the price. The guy doesn't do any work, he just buys stuff and sticks it in his garage for five years and then makes thousands of dollars without doing anything.

Wages are a production cost to the company, but when we're talking about the economy as a whole, wages are good for it. Workers.. spend wages on things from other companies.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Tangent...Pat Buchanan was in error when he said we began the century with a budget surplus...the US deficit has been increasing every year for far longer than that.

Unless he was referring to the beginning ot the 20th Century (don't know if that would be true), but then he'd be guilty of an error in clarity.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."

Define "work". On of my uncles (a very good carpenter) believes that I haven't "worked" for decades - anyone who doesn't get calluses in his hands from labor doesn't work.

The man in your example directly employs people to haul his commodities around, he pays to own/ maintain/rent his trucks and "garage"; most importantly in this scenario, he bear the whole burden of his speculation. If the commodities he purchases don't go up in value enough to recoup his losses in storage and transport, he loses.

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"Dress cops up as soldiers, give them military equipment, train them in military tactics, tell them they’re fighting a ‘war,’ and the consequences are predictable." —Radley Balko

So? Who cares what most people think. Everyone is a clueless **** in one aspect or another, and the majority of people are clueless **** in the majority of aspects. I don't give a **** about what the commoner thinks about speculators and forwards contracts. The fact is, anyone who has ever entered into an option contract like a forwards/futures did so at his own behest. No one ever talks about the time speculators lost money and crops didn't sell well and the farmer made out well. Both parties hold their own counterparty risk. No one can predict the future.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

That depends on whether or not you consider the Global Economy to be a zero-sum game (which it has to be). I feel if every nation's economic output increases proportionally then it is all good.

But if we take a different, but in my view analagous situation, such as say the value of a college education then there are problems with a shrinking GDP. 10 years ago if you graduated college your diploma had a certain value because not everyone had one, but with the current mentality that everyone "deserves" a diploma if they pay for it then its value is decreased. This is because more people are competing in a finite job market with now equal credentials.

In the same way, if the global GDP is a zero-sum game and our share of it is decreasing because everyone else is ramping up their industrial base then it subtracts from our buying power and ultimately costs us. As Buchanan points out though we have no one to blame but ourselves for off-shoring our manufacturing and increasingly our white-collar jobs.

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Treating the global economy as zero-sum is very difficult, because large amounts of assets are option contracts that don't resolve instanenously.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

Pat Buchanan misses the forest for the trees. He wants to resort to protectionism which will simply ensure we are never able to compete in a global market. He blames free trade when we have none of it.

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"...but there exists also in the human heart a depraved taste for equality, which impels the weak to attempt to lower the powerful to their own level and reduces men to prefer equality in slavery to inequality with freedom." - De Tocqueville

No, it really doesn't.

GDP generates wealth. There is not a finite, static amount of wealth. Wealth can be created, wealth can be destroyed. Everyone can get richer, everyone can get poorer. There's not always a benefactor and a victim.

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Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

That's not what is meant. A Zero Sum game means if you are accounting for all the wealth that exists in an instant, that wealth was generated at some cost (labor inputs, raw materials etc.) Essentially, it's a representation of the colliquialism "Nothing is free." That doesn't mean that from instant to instant, there isn't more "value" in the global economy or less.

Example, France gave the United States The Statue of Liberty. That cost the United States, even though it was given, because France is a trading partner and therefore, has less resources now to buy US imports and patronize US businesses. Even if it weren't a trading partners, we may have a mutal trading partner that would affect us in the same way.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

GDP calculations have nothing directly to do with trade, however.

If the USA started the century producing 32% of the world's GDP, and last year produced 24%, that doesn't mean the USA is actually in a slump (let's ignore that the USA is actually in a slump). It could mean several other big countries improved, a LOT. There isn't a finite amount of world GDP to go around...it's all generated separately.

_________________
Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

The point remains. All action in the world is generated at a cost. Whether or not national economic indicators account for them as such or not is irrelevant. GDP is a crock of **** anyway, it was derived from GNP which is useful when the country has a common cause (war) and productive output is basically funneled towards this end.

IF you HAVE something, it WAS paid for. That's all his statement means. GDP's don't sum to 0 because they don't count things that are costs to be costs.

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

It does, however, show accurately that the USA isn't maintaining its dominance in world production. It's losing ground in its lead, even if it's doing so by simply not accelerating as fast as others. You can lose a race you were leading without actually hitting the brakes.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

And again, this isn't a race. Economics are more cooperative in that way. You are not as wealthy dominating the pack as you are if everyone catches you (assuming they caught you by speeding up, instead of you slowing down.) The people of the USA becomes wealthier if the people of China and India become wealthier. It doesn't affect the USA as much as it does those other countries, but you benefit from it. It's the same principle as this...company owners benefit if the average person has more disposable money, because he'll spend it on goods you are selling. It's a win-win situation.

_________________
Well Ali Baba had them forty thieves, Scheherezade had a thousand tales
But master you in luck 'cause up your sleeves you got a brand of magic never fails...
...Mister Aladdin, sir, What will your pleasure be?
Let me take your order, Jot it down -You ain't never had a friend like me
█ ♣ █

Until the guy who owns the company wants to buy a big house, and finds that the average person with disposable money is driving the price up, meaning that he can only buy 1 instead of 2 (getting a summer-home out of his wealth, too).

Likewise, it's one thing to say that other countries can buy more of the US's **** if they "catch up," except that the US is increasingly producing less **** to buy, and is also now facing stiffer competition (and thus higher demand yielding higher cost) for resources like oil.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

People still take things that Pat says seriously?

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It feels like all the people who want limited government really just want government limited to Republicans.
---The Daily Show

Monte still discounts arguments based on who says them?

Oh, look, he does.

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"Aaaah! Emotions are weird!" - Amdee
"... Mirrorshades prevent the forces of normalcy from realizing that one is crazed and possibly dangerous. They are the symbol of the sun-staring visionary, the biker, the rocker, the policeman, and similar outlaws." - Bruce Sterling, preface to Mirrorshades

Who knows, but this is exactly why no one takes you seriously. Because, in order to play by your own rules, we must discount what you say based on the fact it is you saying it. For example, even if you talked about your area of personal expertise, we would have to discount it no matter how valid or accurate what you said is based on completely irrelevant and unrelated reasons. I could just dismiss anything you had to say about martial arts or swordsmanship based on the fact that you support health care reform. See how silly that is?

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"It's real, grew up in trife life, the times of white lines
The hype vice, murderous nighttimes and knife fights invite crimes" - Nasir Jones

No, no, see his ideas are perfectly reasonable and sound, and well, right! Buchanan's ideas are silly and wrong. You can only discount people who say things that are.. well.. not the right things.

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"Hysterical children shrieking about right-wing anything need to go sit in the corner and be quiet while the adults are talking."