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Growing trade deficit is selling the nation out from under us (2003) [pdf]

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Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#91

Post by eyko »

zabzonk wrote: post #9

Strange. I, as a UK citizen, don't seem to buy almost any physical USA goods at all.

As a UK non-citizen resident, my observation is that our economy is pretty much involved with USA (and the global economy more generally).

I just looked up the latest trade and investments factsheet[1] and there are some interesting deets. If you're wondering about direct investment in the US as well as imports:

- Total UK imports from United States amounted to £111.5 billion in the four quarters to the end of Q3 2024 (a decrease of 5.1% or £5.9 billion in current prices, compared to the four quarters to the end of Q3 2023).

- In 2023, the outward stock of foreign direct investment (FDI) from the UK in United States was £494.1 billion accounting for 26.7% of the total UK outward FDI stock.

In addition to direct investment I would also count portfolio investment since we're sort of involved at an individual level through our workplace pensions (and/or personal), savings, stocks and shares ISAs, and so on. A preliminary report[2] foreign holdings of US securities as of June 2024 puts the UK as the top holder at over 3 trillion USD.

1. https://assets.publishing.service.gov.uk/media/67b6f8efbd116...

2. https://home.treasury.gov/news/press-releases/sb0037

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#92

Post by thaumasiotes »

graemep wrote: post #77
thaumasiotes wrote: post #45

Earlier quoted context omitted.

Quoting from wikipedia: > Prior to 20th-century monetarist theory, the 19th-century economist and philosopher Frédéric Bastiat expressed the idea that trade deficits actually were a manifestation of profit, rather than a loss. He proposed as an example to suppose that he, a Frenchman, exported French wine and imported British coal, turning a profit. > He supposed he was in France and sent a cask of wine which was wor…

That sounds like a forerunner to Ricardian comparative advantage which is a major (really the major) reason for thinking international trade makes everyone better off. https://en.wikipedia.org/wiki/Comparative_advantage

Forerunner? Bastiat would have been 15 when Ricardo published.

But note also that the example doesn't make any use of comparative advantage. It's sufficient that the value of the coal is different in different places. This is about how water is more valuable when you're dying of thirst, not about how water is easy to produce if you live on an island in a freshwater lake.

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#93

Post by nosianu »

ggm wrote: post #32
FollowingTheDao wrote: post #20

Earlier quoted context omitted.

It’s not good. Warren Buffett just says horrible things in a polite voice.

He says when he thinks he's wrong. This is 22 years old. What does he think now?

He is 94. No matter how much experience he has, I question the value of anything he might say these days, at least in comparison. There should be other people to listen to by now - probably even from his same organization, if you want to.

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#94

Post by yonran »

I think the parable of Squanderville and Thriftville is interesting and it reminds me of the chapter of Henry George’s Progress and Poverty that also warns that renters can be a slave to the landowner (https://www.gutenberg.org/cache/epub/55308/pg55308-images.ht...). I’m wondering to what extent is Squanderville a warning against monopolies and private property in land, as opposed to a warning against debt and trade deficits? Would Land Value Tax fix this?

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#95

Post by tzs »

thefounder wrote: post #58
mysecretaccount wrote: post #42

Earlier quoted context omitted.

iPhone sales don't count as a US export when calculating the trade deficit? Does anyone have information on this? Seems like a major issue indeed.

Of course they don't because they are made in China. Do you think that Ford cars manufactured in Mexico count as U.S export?

They are assembled in China. Most of the parts are made elsewhere and shipped to China.

Should the entire price of the phone count as a Chinese export?

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#96

Post by rib3ye »

iNic wrote: post #26

Interesting, and worrying at the time, but he clearly turned out to be wrong. The trend never stopped [1] and is not obviously responsible for any negative economic trend. The trend has continued [2]. The thing to worry about is probably not that it is happening, but who is holding these investments. [1]: https://www.bea.gov/data/intl-trade-investment/international... [2]: https://fred.stlouisfed.org/graph/?g=1HrHY

It's moments like right now that the white collar class seems forget the wealth inequality in the US that's been widening over the last 50 years.

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#98

Post by wiz21c »

kymki wrote: post #66

As a European this whole debate i sickening. Trade deficit is a blunt and ineffective way to model international trade on this level, but it is easy to point at and say "look at this large bad number!" which is exactly what is going on. People are primed to interact with that through social media, etc. The American trend currently is that any trade deficit is bad. It simply isnt. It is idiotic to state so. The whole…

> It is extremely inefficient for every country to specialize in everything equally.

Except when you have to produce gazillions of CO2 to move things around or when the "efficient" countries are those who don't look at the health of their workforce...

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#99

Post by wiz21c »

graemep wrote: post #90
zabzonk wrote: post #9

Strange. I, as a UK citizen, don't seem to buy almost any physical USA goods at all.

As an individual you would own consumer goods. A lot of international trade is other goods. Think of how much the UK has paid for things like American aircraft, ships, machinery, or materials used in manufacturing. Our armed forces use a lot of American stuff, and often even British made things have American parts (and a lot of it is covered by ITAR, to an even greater extent than the rest of Europe). People also ten…

I certainly don't need planes, war stuff nor ships and machinery. The food I eat mostly come from my country, my car is made in countries close to mine and so are the materials used to repair my house... And my gaz is Poutine's.

So I fail to see why I need America at all...

Ah, yeah, one big exception: my computer. Argh!

Re: Growing trade deficit is selling the nation out from under us (2003) [pdf]

#100

Post by zabzonk »

graemep wrote: post #90
zabzonk wrote: post #9

Strange. I, as a UK citizen, don't seem to buy almost any physical USA goods at all.

As an individual you would own consumer goods. A lot of international trade is other goods. Think of how much the UK has paid for things like American aircraft, ships, machinery, or materials used in manufacturing. Our armed forces use a lot of American stuff, and often even British made things have American parts (and a lot of it is covered by ITAR, to an even greater extent than the rest of Europe). People also ten…

> As an individual you would own consumer goods.

Not American ones I don't.

Is Trump suggesting tariffs on incredibly over-priced and under-performing military and civil aircraft, when we can buy from Europe, or make our own?

To me it seems that the only things the USA sells us are horrible foods, and crap cars for fat people.

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