Why does the U.S. always run a trade deficit?

> China's GDP (PPP) is already ~22% higher than the USA's [1]. Arguably, isn't this a better measure of value? PPP measures the real value to the citizens in a nation, and more closely measures actual economic activity.

Only if the only things you purchase are exclusively domestic. Turns out, the vast majority of Chinese citizens with any means are interested in foreign products (like most people in the world).

I assume that the New York Fed would like Americans to be more patriotic, save more, and buy less cheap imported crap, that's why they wrote this article in this way. But it skates past a few key issues.

1. Consumption doesn't zero out, because domestic consumption in the USA is mostly spent in China, not in the USA. That is what contributes to the trade deficit, not lack of saving.

2. Asset price inflation contributes hugely to the money supply. Where is this in this equation? It's not saving, it's not investment, it's not consumption, it's mind boggling amount of money created from nothing. That asset price inflation is the true source of wealth creation and money supply growth, not bond sales, quantitative easing, or whatever.

3. Domestic saving is in no way equivalent to productive investment in the US economy. Are people keeping money in their mattress considered accounting discrepancies? Companies hoard cash like dragons. What investment in USA? Have you seen much new equipment or new factories? What investment means here is pumping up USA asset prices, it stretches the definition of the word investment to the absolute limit. Domestic saving just ends up as unused savings in an account somewhere, we don't have a good mechanism to put it to actual productive use.

4. The true role of the Federal Reserve is to stabilize and increase asset prices. Money can be easily created by stimulating asset price growth.

5. Funds from abroad don't finance business investment in USA. Investment is a very nice way to put it. They are foreign funds snapping up American real estate and other hard assets. Investment somewhat implies it will lead to economic benefits. Foreign ownership of American assets, companies and real estate is what "investment" means. It doesn't mean growth, it means shrinkage, I think the foreign owned assets tend to lose their value.

Only if you find a way to tax the rich in other countries.

Taxing the US rich redistributes money within the country while the problem (or a perceived problem, depending on your stance) is that US bleeds money across the board.

> I don't see why anyone would be so virulently opposed to moving some industrial subsidy spend to expanding healthcare...

This is because many media outlets, whether intentionally or unintentionally, promote the 'China collapse theory,' making it difficult to draw reliable conclusions from curated information.

Take the FT article you cited earlier as an example. As someone living in China with parents who have chronic illnesses, let me describe what healthcare is actually like here:

My father and grandfather both have diabetes. They use NovoRapid insulin at about 40 RMB(6 USD) per pen, requiring 1-2 pens monthly (totaling 100 RMB, 14 USD). Domestic Chinese brands cost roughly half that price.

My mother and I have hyperlipidemia. Lipitor costs about 70 RMB(10 USD) monthly, while domestic alternatives cost around 10 RMB (2 USD).

China's healthcare system features centralized procurement policies where the government negotiates directly with pharmaceutical companies. To have your products included in the insurance formulary and reach more patients, manufacturers must reduce prices.

While this system has some issues (which we could discuss later), nearly all medications—including imported ones—are significantly cheaper in China than in the US.

Two years ago, my grandfather spent his final two weeks in ICU at a cost of 120,000 RMB (16700 USD). Insurance covered 100,000 RMB (14000 USD), leaving us with 20,000 RMB (2700 USD) out-of-pocket.

Regarding insurance coverage:

Rural and urban insurance have different reimbursement rates, but generally cover over 50%. My parents' retirement income is about 4,000 RMB (560 USD) monthly—relatively high for urban workers. In tier-3/4 cities, most retirees receive over 1,000 RMB (140 USD)monthly.

Now examining your cited article: Those two farmers never participated in any insurance programs. Having never contributed to:

- Pension funds (hence receiving only the minimum 150 RMB, 20USD monthly—standards vary by city, e.g., ~1,400 RMB,200USD in Shanghai)

- Medical insurance (400 RMB lowest level, 55USD annually, fixed.), making them ineligible for reimbursements. Rural insurance even allows retroactive payments-coverage begins three months after payment, regardless of preexisting conditions.

While such cases exist, they're exceptionally rare. In my entire life, I've only known two families who didn't enroll in insurance—both were wealthy enough to purchase private coverage.

Were those panics ultimately bad for growth? The US in the 1800s was one of the fastest growing economies we've ever seen in all of human history; growing from ~0% to ~20% of the world economy. It isn't often someone outpaces that. The gold standard clearly didn't limit growth in any concerning way if you are associating it with one of the top 10 all time growing economies. In fact, dropping the gold standard has been associated with the economic weakness that characterises the modern US as they mean regress and the Asian powers regain economic ascendancy.

Panics and crisises aren't automatically a bad thing. If people are doing something wildly stupid they need to stop and undertake alternative activities. Something has to make them do that; if it is a panic then that is better than persisting with stupidity. Besides, the US still has regular crisises. There is one every 10 years or so. They just don't see as much upside between them as they used to.

> The shortages powered William Jennings Bryan to the Democratic presidential nomination after his "Cross of Gold" speech.

If Trump says something does that automatically make it true in 100 years? No. Politicians aren't automatically right and neither are voters. People get stuff wrong in policy all the time. Popularity and truth are different.

And Wikipedia suggests that most people disagreed with him regardless, he lost the election and the US proceeded to adopt a gold standard. Which still doesn't tell us much about its policy merits I might add.