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Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

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Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#11

Post by JumpinJack_Cash »

This whole balancing the trade deficit is utopia.

I will just give a small example using black leather jackets.

Black leather jackets are indestructible, you can spill any sort of fluid on them, try to light them on fire (they won't catch fire) throw them in the dirt etc.

They never go out of style either, there is basically no reason why an adult should own more than one black leather jacket.

Now think of how many black leather jackets do you own.

See? People have to find within themselves the will to stop their consumerism , not with this sort of central planning idiocy. And it's not granted that doing away with consumerism is desirable either.

Like for example Trump's impact on American society was much better when he was buying planes, yachts, supercars and foreign models than what it has become of him now that he has stopped pursuing those things.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#12

Post by leereeves »

ein0p wrote: post #5
ComputerGuru wrote: post #4

The important part is that this doesn’t seek to force a zero trade deficit on a per-country basis. Imagine insisting Cambodia has to buy as much US goods (taking into account the type of goods the US exports) as US companies import from Cambodian factories.

Buffett's suggestion, while elegant, would require that Congress passes legislation on this, which there's zero percent chance that it would, in its present state.

I fear that Congress will be unable to pass anything that isn't a budget resolution for the foreseeable future.

The filibuster rule requires bipartisan agreement to implement any proposed policy, and neither party wants to give an administration from the other party any kind of win.

Perversely, the better the idea, the less likely it is to pass Congress.

Better idea -> it will be successful -> it will be popular -> the administration will benefit politically -> the other party will oppose it -> it won't get 60 votes in the Senate -> it won't become law

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#13

Post by margalabargala »

ein0p wrote: post #5
ComputerGuru wrote: post #4

The important part is that this doesn’t seek to force a zero trade deficit on a per-country basis. Imagine insisting Cambodia has to buy as much US goods (taking into account the type of goods the US exports) as US companies import from Cambodian factories.

Buffett's suggestion, while elegant, would require that Congress passes legislation on this, which there's zero percent chance that it would, in its present state.

The current state of the government is that Congress has tacitly ceded their power to the President. They are allowing him to do things that generally would not be permitted with out Congressional approval, because the majority is aligned with him anyway.

An intelligent or competent leader who had the power currently enjoyed by the President would be able to implement the system suggested by Buffet, and it would likely see less opposition than the current tariffs have.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#14

Post by rayiner »

ComputerGuru wrote: post #4

The important part is that this doesn’t seek to force a zero trade deficit on a per-country basis. Imagine insisting Cambodia has to buy as much US goods (taking into account the type of goods the US exports) as US companies import from Cambodian factories.

Over 90% of the trade deficit is attributable to China, the EU, Mexico, Vietnam, Taiwan, Japan, South Korea, and Canada. These are big, diversified economies. Nobody is focused on Cambodia.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#15

Post by throw0101d »

That's from 2003.

In a more recent interview in March 2025:

> Asked about how tariffs will affect the economy, Buffett stated, "Tariffs are actually, we've had a lot of experience with them. They're an act of war, to some degree."

> I asked, "How do you think tariffs will impact inflation?"

> "Over time, they are a tax on goods. I mean, the Tooth Fairy doesn't pay 'em!" he laughed. "And then what? You always have to ask that question in economics. You always say, 'And then what?'"

* https://www.cbsnews.com/news/warren-buffett-on-legendary-was...

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#16

Post by wat10000 »

tromp wrote: post #3

The salient part: > The time to halt this trading of assets for consumables is now, and I have a plan to suggest for getting it done. My remedy may sound gimmicky, and in truth it is a tariff called by another name. But this is a tariff that retains most free-market virtues, neither protecting specific industries nor punishing specific countries nor encouraging trade wars. This plan would increase our exports and mig…

This is basically introducing a second US currency and mandating that it must be used for international trade.

Having different currencies for internal vs external trade isn’t usually something I associate with prosperous countries.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#17

Post by Fade_Dance »

rayiner wrote: post #8

Interesting point. I hadn't thought of it this way before: > But imagine that the Japanese both want to get out of their U.S. real estate and entirely away from dollar assets. They can’t accomplish that by selling their real estate to Americans, because they will get paid in dollars. And if they sell their real estate to non-Americans—say, the French, for euros—the property will remain in the hands of foreigners. Wit…

It works the other way as well. Ex: exporting dollars solidifies a bid for US debt (because by far the easiest way to use excess dollars is to buy US treasuries), which allows the US to keep easily exporting dollars. When capital flows to the US are sustainably strong, the dollar performs well (which is amplified from being the reserve currency for international trade), which means foreign capital is incentivzed to join the bandwagon (strong dollar + strong US assets performance = great returns for international participants). It's self reinforcing to the upside, and it's theoretically somewhat self-reinforcing if it unwinds as well.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#18

Post by rayiner »

throw0101d wrote: post #15

That's from 2003. In a more recent interview in March 2025: > Asked about how tariffs will affect the economy, Buffett stated, "Tariffs are actually, we've had a lot of experience with them. They're an act of war, to some degree." > I asked, "How do you think tariffs will impact inflation?" > "Over time, they are a tax on goods. I mean, the Tooth Fairy doesn't pay 'em!" he laughed. "And then what? You always have to…

> That's from 2003.

Would you argue that the period between 2003 and 2025 have strengthened or weakened the case for free trade?

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#19

Post by twic »

JumpinJack_Cash wrote: post #11

This whole balancing the trade deficit is utopia. I will just give a small example using black leather jackets. Black leather jackets are indestructible, you can spill any sort of fluid on them, try to light them on fire (they won't catch fire) throw them in the dirt etc. They never go out of style either, there is basically no reason why an adult should own more than one black leather jacket. Now think of how many b…

> Now think of how many black leather jackets do you own.

None. I don't really understand this analogy.

Re: Buffett: America's Growing Trade Deficit Is Selling the Nation Out from Under Us [pdf] (2003)

#20

Post by paxys »

Buffett has been aggressive selling stock in the last year ($134 billion total in 2024) and Berkshire is right now sitting on $334 billion cash vs $272 billion in equities. Kinda funny because he's the first one who will tell you "don't time the market", but he definitely timed it to perfection.

"Be fearful when others are greedy and greedy when others are fearful".

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