Donald Trump

Trump's Self-Defeating Trade Policy

No president can repeal the laws of economics.

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Trump
Mark Reinstein/ZUMA Press/Newscom

Opposition to free trade was to Donald Trump's campaign what burgers are to McDonald's: not the entire menu but the essence of the brand. His fabled appeal to rural whites and unemployed steelworkers arose largely from his vow to get tough on foreigners who have been flooding us with goods.

It has never been clear whether Trump sincerely believes what he says—given his history of making products in other countries offering low-cost labor—but it's always been apparent that he has no real grasp of the subject. He doesn't know much, and he doesn't know what he doesn't know.

When he bragged about the $50 billion the Japanese SoftBank Group plans to invest in the United States, Trump clearly had no clue that it will actually hinder his effort to curb imports.

Before people in Japan can make such an investment, they need American dollars, which are not printed in Tokyo. How do Japanese get American dollars? By selling goods or services in the United States.

Every increase in foreign investment or lending here has to be accompanied by an equal increase in our trade deficit. It's a simple accounting truism. A $50 billion increase in Japanese investment translates into a $50 billion increase in Japanese imports. Trump can boost foreign investment or reduce imports, but not both.

His threat to hit China with stiff tariffs has had similarly self-defeating consequences. Worries he'll start a trade war have caused a sharp decline in China's yuan against the dollar—which will reduce the price of Chinese goods shipped here while raising the cost of American products sold there. After attacking the Chinese for lowering the value of their currency, the president-elect has driven it down for them.

He exhibits scant knowledge even on his favorite topics. Though Trump denounces NAFTA as a disaster, I've never heard him cite a single provision he doesn't like. All he knows is that we run a trade deficit with Mexico, which he assumes is a terrible thing.

When he visited the Chicago Tribune for an interview with the editorial board last year, he claimed to favor free trade but complained that Ford was building a plant in Mexico and employing Mexicans. Asked whether that isn't how free trade works, he replied, "What do we get out of it?" His answer: "We never get anything."

What we get from plants in Mexico that ship goods to the United States is just that—goods Americans want at a price they are willing to pay. The chief benefit of international commerce is that it allows the people of a nation to consume more than they would be able to if they had to make everything for themselves. This proposition is one of the oldest and most durable insights of economics.

Trump has the idea that he can save and add American jobs by discouraging U.S. companies from moving production to other countries. He's even threatened to punish those that do. But this is a futile remedy.

If gas furnaces can be made at a lower cost in Mexico, it ultimately doesn't solve anything for Carrier to keep manufacturing them in Indiana. Why not? Because its competitors, foreign or domestic, can put their plants in Mexico, gain a cost advantage and take sales away from Carrier. In the long run, Indiana may find that these jobs won't move away; they'll just disappear.

Trump assumes he can force companies to build more in the United States by imposing tariffs on goods they make overseas for sale here. It would surprise him to learn that such duties would harm not just American consumers but also American producers.

U.S. automakers use a multitude of imported components. Most of the cars built on our soil, in fact, contain more than 25 percent foreign parts. A lot of other products assembled here include materials or pieces made elsewhere.

As a result, any duties slapped on imports would inflate costs for American manufacturers, making it harder for them to sell both at home and abroad. It would even hurt other U.S. firms that buy and use imported goods in their operations. In an era of global supply chains, punishing foreigners amounts to punishing American companies and their workers.

Trump can scrap trade deals, pick fights with China, push for punitive tariffs and try to force companies to keep plants here. But what he really needs to do is find a way to repeal the laws of economics.

© Copyright 2016 by Creators Syndicate Inc.

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  1. Actually his trade policy was one of the few things I really liked about him. The Chinese and Russians and Mexicans are taking advantage of us and he will put a stop to it. Also we are losing so much money with our trade deficits – this is basically manipulation and theft by foreign powers. Trump will fix it. He understands these issues better than Obama and Hillary. I’m glad I voted for him. Your tears are yummy.

    1. Re: AddictionMyth,

      Actually his trade policy was one of the few things I really liked about him.

      Being economic illiterate is not your fault, just so you know. But this is not “Economic Illiterates Anonymous” so please stop showcasing your ignorance here.

      The Chinese and Russians and Mexicans are taking advantage of us

      Why, those Mexican rapists!

    2. I know right!!!! They get to work for slave labor and all we get out of the deal are cheap products. They are fucking us SOOOO hard!

    3. C-. Only snagged three replies.

      Then again, american socialist came right away and showed the real deal, so you were hamstrung from the start.

  2. I’m with AM. Trump is good on trade policy and is going to get tough on legal immigration. Since I’m a new engineer in theoretical competition with engineers from other countries my job prospects and advancement potential are increased by a Trump presidency. That, and his policies to end student loan debt after 15 years of payment will result in this Leftist not having to pay ~75k in debt payment. You go Donald Trump, champion of the working class coal miner in West Virginia.

    1. Hope your second career works out well enough that you can actually pay your mortgage this time ’round.

    2. You know who else self-described as a socialist who was pro-nationalism?

      1. I’m with AM

        Troll sides with troll. The solution: speak to netiher.

        1. I know, i know, but i couldn’t resist the implicit Godwin.

        2. Are we really supposed to believe they’re not the same person?

          1. This. I think AmSoc, AM, and dajjal are all sock puppets of the same demented retard.

            1. Progressives are all part of the same retarded hive mind.

              1. A bit rich coming from a website where every comments section follows the same formula of “Do you know who else…?” followed by a list of unimaginatively conjured villains.

      2. Agent Smith?

  3. You know who else wished to repeal the laws of economics at the behest of a deluded populace with a love for authoritarian government?

    1. Stalin?

    2. AdMyth and amsoc?

    3. Hillary? Bernie?

    4. John Maynard Keynes?

    5. Every Democrat ever?

    6. FDR,Truman,LBJ,Nixon

    7. “The Minister of the Economy was Hjalmar Schacht. He introduced his “New Plan”. This plan intended to reduce imports, reduce unemployment, channel government spending into a wide range of industries and make trade agreements with other nations. Hermann Goering also wanted Germany to become self-sufficient in all industries so that as a nation she could survive a war. Were these plans successful?

      By 1939, Germany still imported 33% of its required raw materials, government income had been 10 billion Reichsmarks in 1928. In 1939, it stood at 15 billion. However, government spending had increased from 12 billion Reichsmarks in 1928 to over 30 billion in 1939 ? a difference of 15 billion Reichsmarks. From 1933 to 1939, the Nazi government always spent more than it earned so that by 1939, government debt stood at over 40 billion Resichsmarks.

      Balance of trade figures had gone into the red by 1939 by 0.1 billion Reichsmarks. Unemployment had fallen from 6 million in 1933 to 300,000 by 1939 and industrial production in 1939 was above the figure for Weimar Germany before the 1929 Wall Street Crash. Annual food consumption in 1937 had fallen for wheat bread, meat, bacon, milk, eggs, fish vegetables, sugar, tropical fruit and beer compared to the 1927 figures. The only increase was in rye bread, cheese and potatoes.” http://www.historylearningsite…..n-economy/

      1. What is a fish vegetable?

    8. Most politicians, everywhere, ever?

    9. That former bus driver in Venezuela?

    10. Colonel John ‘Hannibal’ Smith?

  4. About all you have to know about trade is that the so-called “trade deficit” is a figment of creative accounting.

    A. Dollars out have to equal dollars in. When Toyota sells a car in the US, they take greenbacks back to Japan, and the only thing they are good for is spending in the US. They can make detours through other countries, but they are only worthwhile as long as the holder knows they will be accepted by someone to buy something else.

    B. It is as ludicrous to speak of trade deficits with individual countries as it is to speak of people having trade deficits with their grocer or hardware store. We run trade deficits with everybody we buy stuff from, unless we happen to work for them, or sell services or products to them.

    C. Accountants account for certain products in a separate category from those which go into the “trade deficit”, for no reason that makes sense to anybody but accountants and politicians. Toyota can build a factory in the US or buy one, and one goes towards the trade deficit while the other doesn’t. The practical end result is the same: dollars spent in the US. But politicians get to flaunt one as being a trade deficit, and the press happily brays along with them. converting fake news into headlines.

    1. “”””Dollars out have to equal dollars in. “”‘

      No, the Treasury and Fed create them out of thin air

      “””and the only thing they are good for is spending in the US””‘

      No, you yourself contradict this in your next sentence. Many dollars never come back to the US

      “”””It is as ludicrous to speak of trade deficits with individual countries as it is to speak of people having trade deficits with their grocer or hardware store”””

      I can have a deficit with a grocer, especially if I can print up my own money

      1. Printing money has nothing to do with trade deficits.

        If foreigners want to keep dollars in their bank accounts and not spend them, that’s great — Toyota can send us all the cars they want and never spend those dollars, and … tell me again how we lose?

        Your reading comprehension is pretty abysmal. I specifically wrote that counting trade deficits with individual countries and you counter with a trade deficit with a single store, except you throw in counterfeiting as if to make the argument different. Fuckwad.

        1. “”””Toyota can send us all the cars they want and never spend those dollars, and … tell me again how we lose?”””

          Because if it continues then one day they won’t accept any dollars and nor will anyone else.

          At one time tulips were worth the same as a rich man’s house, and then almost over night they were not worth the same as a turnip.

          At another time it was good business to sell $750,000 houses to illegal alien strawberry pickers, and then it wasn’t

          Your talking about supporting a economy based on a scam, creating a huge bubble in dollars. But the end result does not look pretty, sure some will make money off of it but most will lose big

          1. You don’t even begin to make sense or have any connected thoughts.

            The Tulip mania was just another financial scam and had nothing to do with trade deficits or counterfeiting money or whatever else your imagination can think of. The housing bubble was a predictable and predicted consequence of stupid government housing policy. Why not mention the transition from fireplaces to stoves for cooking while you’re at it?

            Go ahead, answer my question. How is anyone hurt if others sell them goods and throw away the money which paid for them, and why would anybody do something so stupid?

            1. Because as I point out the dollar today is a financial scam and is in a bubble and when the bubble pops those with dollars lose big.

              And what is the US going to trade once the dollar pops?

              1. I ask again: what do printing money and financial scams have to do with trade deficits?

                Bubbaluablubbbabhhhn is all I hear. Did you vote for Herself?

            2. I read that as “Tulpa mania” and it made me hopeful that, on Hit’n’Run at least, it might be possible to reach Peak Troll.

              1. Tulpamania running wild brother!

                1. Someone ought to create a wikipedia page for that and see how long it lasts.

    2. I’d say that more accurately, trade deficits are real and balance of trade is not a scam perpetrated by the FASB. It’s just a way of measuring something completely innocuous that doesn’t mean what most people think it means.

      1. Trade deficits are entirely a fictitious way of cooking the books. They are as real as any accounting trick, and that’s as far as they go.

        1. Keeping track of things isn’t “cooking the books”. It’s a measure, nothing more. Balance of trade is just a comparison of two numbers. You can say it’s not especially useful, but it’s not nefarious. You might as well say that EBITDA is a scam.

        2. Somebody here confuses counterfeit paper money legal tender with the balance of trade. When France an England bought victuals and materiel on credit to fight Germany they soon learnt the difference on the gold standard.

      2. This comes down to semantics. I would say that trade deficits are not real. As you say it’s just a measure. The measurement methodology is real, but it means nothing. If we decide to measure the trade deficit by multiplying the number of words in Taylor Swift’s next song by the jersey number of the next Super Bowl MVP, the measure is real, but the trade deficit is meaningless, i.e. not real.

    3. A trade deficit is not ludicrous. The money we buy things with has to come from somewhere. If we are running an overall trade deficit, it comes from either borrowing or printing it. Trade deficits only became an issue when we went to fiat currency. Under the gold standard, trade deficits solved themselves. Eventually, the country running one would run out of credit and currency and the deficit would go away.

      It is a bit ironic that the same people who rightfully object to endless borrowing and printing money find endless trade deficits financed with borrowing and printing money to be just fine.

      1. There is no trade deficit It is an accounting fiction created by artificially segregating some expenditures in one column and others in other columns.

        Dollars out equal dollars in. To speak of what happens when we run a deficit is as useful as speculating on what happens when 2 + 2 == 5.

        Before you can discuss trade deficits, you have to first explain how they can happen, how dollars out can differ from dollars in.

        If we buy things and send dollars overseas, what possible reason would foreigners have for not using those dollars to buy from us?

        If foreigners buy from us, they have to use dollars; where do those dollars come from if not from selling to us?

        Trade deficits are fictitious. You have to explain how they can exist before you discuss the ramifications of them.

      2. Re: John,

        A trade deficit is not ludicrous.

        Yes, it is. I’m laughing at you already.

        The money we buy things with has to come from somewhere.

        That doesn’t matter in the context of trade, because you ALREADY HAVE the dollars when you come to the trade, so why would it matter? It’s like questioning my efforts to obtain more Mickey Mantle cards to trade for your Babe Ruth cards when I already brought them to the trade. Why would you care? What possibly consequence could it have for the trade? I would think that you should mind your own business and either trade or sod off.

        Trade deficits only became an issue when we went to fiat currency.

        That’s a lie. Mercantilists have always complained about so-called “trade imbalances” even during times when everything was traded with hard currency. Most objections regarding trade deficits come from people who suddenly see their market share shrink. It is the old Protectionist Siren Song derived from pure and irrational jealousy, not economics.

        It is a bit ironic that the same people who rightfully object to endless borrowing and printing money find endless trade deficits financed with borrowing and printing money to be just fine.

        It’s not irony. It’s called “knowing actual and honest-to-God sound economics”.

      3. A trade deficit is ludicrous in that people think it means something. A trade is an exchange of items with value. If I buy a Toyota from Japan by trading my Ford I got from from Detroit, did the country just run a trade deficit? If you think so, please explain why and how it has meaning. If anything the country ran a surplus, since I would not make the trade unless the Toyota was worth more than the Ford. If I use dollars to make the trade instead of a Ford, does the situation change? I still exchanged an item of value for something of at least that value. Where’s the “deficit?”

    4. I almost made a breakthrough with my old man over ‘trade deficits’ with this argument.

      Imagine if foreign companies just sent us widgets, no charge. Load em up on boats and drop them off at the dock in California, free for the taking to whoever wants to pick them up.

      Would we be richer? After some hemming and hawing he agreed there is no point in paying Americans to produce something that lands on our shores free of charge.

      Of course if the foreign companies start charging for the widgets, but still at less cost than they could be made here…and he reverted to protectionism again.

      Maybe next time.

    5. Persistent trade deficits are not a figment of creative accounting – nor are they evidence of ‘free trade’. They are evidence of a country which is systematically protecting its financial sector at the expense of its stuff sector. The reverse is true for persistent trade surpluses – stuff protected – though that also has a name – mercantilism.

  5. To many of us, Trump’s “brand” was “not-clinton”. That’s all that really mattered.

    1. You know who else was “not-clinton”? Every single goddamn person except for Herself.

      That includes Hitler.

      1. I call a foul! You asked the question and then answered it…you gave us no opportunity to have any fun.

        1. You know who else gave us no opportunity to have any fun?

          1. James Newell Osterberg, Jr.?

            1. Roger Goodell?

          2. Christian Bale as Batman?

  6. Mr. Chapman is correct on economics. However, he needs to repeal the laws of American politics. Trump did not invent protectionism and high tariffs. They have been part of American politics since the beginning.

    Remember Alexander Hamilton, star of recent hip hop musicals with obscenely high ticket prices? He supported high tariffs to protect American industry. Richly ironic that the cast of his play would therefore be critical of the incoming Trump administration.

    Henry Clay supported high tariffs as part of his soul ? called American system. The Republican Party supported hi tariffs for nearly the first 90 years of its existence. Only the 1960s did matters change. The Democrats then became the party of protectionism and “buying American” until the 1990s.

    Trump’s protectionism resonated with Americans because protectionism has been part of our political culture. And we need to remember this when we argue against it.

    1. Mr. Chapman is correct on economics

      No he is not. Chapman is a complete moron who understands nothing about how international trade works. If he is right, it is by accident not because he knows anything or is in any meaningful way correct.

      1. Call him down John. even a broken clock is right twice a day

      2. Watch it John. If Hitler said the sun rose in the east, would you call him a complete moron who understand nothing? In fact, you are the one who doesn’t understand that 2 + 2 does not equal 5.

        1. If he said the Sun Rose in the east because Apollo road a chariot across the sky from the east every day, I would say that. And that is what Chapman is doing here.

    2. “How do Japanese get American dollars? By selling goods or services in the United States.”
      -Chapman’s article

      Is Chapman really that stupid? You can buy currency on the open market- so not just goods and services in the USA.

      Government policy that impedes commerce tends to be bad. Trumps policy is even out lopsided trade deals. I think that the consumer ends up fixing shady trade deals because the products are either purchased or not.

      I am more worried about military weapons being sold overseas against some of our future enemies. If the plan is to sneak in hidden CIA tracking devices to military electronics, okay I get it. It seems that this type of trade is to keep the Military Industrial Complex flush with money because even the US military does not need as much as they want to sell. Plus, there is definitely the aspect of keeping plenty of weapons floating out there because neo-cons.

      1. Is Chapman really that stupid?

        Apparently so. I didn’t believe it but then I saw that Scarecrow is just as fucking stupid.

      2. Government policy that impedes commerce tends to be bad. Trumps policy is even out lopsided trade deals.

        If it’s nonsensical how people overreact to Trump, it’s also nonsensical how people try to spin Trump in the best way possible. Trump advocates placing high tariffs on imports. That is precisely a government policy proposal that would impede commerce, which you say tends to be bad. It doesn’t help anyone to use euphemisms to paper over Trump’s bad policy proposals.

      3. Re: loveconstitution1789,

        Is Chapman really that stupid? You can buy currency on the open market- so not just goods and services in the USA.

        ????????????????????????????????
        That is the level of ignorance that us libertarians who know sound economics have to contend with.

        IIf the Japanese can get dollars in the open market without lifting a finger, then why would Japanese companies bring Toyotas and other goods to the US for? Why spend their time and capital?

        The reason is because you need to PRODUCE things in order to trade them for other things. Money is the representation of previously-created goods and services.

        Trumps policy is even out lopsided [sic] trade deals.

        Jesus F. Christ, how IGNORANT can people be. Not only that, how can YOU commit these perfunctory contradictions without ever blushing?

        TRADE is a completely rational action, where BOTH parties expect to BENEFIT from the trade ex ante, otherwise the two parties would not trade. This means that NO trade can be “lopsided”. That’s IMPOSSIBLE. It’s like saying that you can get more energy from a system that you put in. Thinking that a trade YOU were not a party to is “lopsided” gets filed under “Your Mere Opinion On The Matter.”

        1. The reason is because you need to PRODUCE things in order to trade them for other things. Money is the representation of previously-created goods and services.

          True, but the Japanese don’t have to sell them in the US in order to have dollars. A Japanese company could sell solely to, say, Indonesians, and convert the profits to dollars to invest in the US.

          1. I am no expert on econ, but I would think that SOMEONE has to sell products/services to the US to get the dollars, so even if you sold to Indonesia and demanded US dollars, it would still mean that someone sold products/services to the US at some point beforehand.

            1. Re: Jimbo,

              You’re right and the people who attack Chapman and justify the attack with the argument that you can buy dollars in the “open market” are dumb. They’re merely trying to justify El Se?or Presidente Trumpo’s protectionism by alluding to a “trade deficit” that doesn’t exist. The dollars avaialble in the “open market” have to come from somewhere. Money is the representation of previously-produced goods and services; we use money because it is much more difficult to trade the produced goods and services directly – i.e. barter. But the use of money is still a form of barter, albeit an indirect one.

  7. It has never been clear whether Trump sincerely believes what he says?given his history of making products in other countries offering low-cost labor?but it’s always been apparent that he has no real grasp of the subject.

    Yeah, I’m sure a guy with a Wharton economics degree and 4 billion dollars needs Steve Motherfucking Chapman to explain economics to him.

    Sometimes your opponents can be wrong without being ignorant or stupid. Sometimes you can be right despite being ignorant and stupid.

    1. George Soros, a guy with a London School of Economics degree and more than 20 billion dollars, doesn’t need anyone explaining economics to him, right?

    2. Paul Krugman has a Nobel prize in economics and he thinks that using massive resources to thwart a pretend alien attack, rather than using those resources to produce something of value, is good for the nation. So credentials don’t necessarily translate to common sense. Someone needs to explain to Trump that trading one thing of value for another thing of value is good for both parties to the trade. But he probably knows this, as that’s how he got his billions of dollars. What he doesn’t seem to know is that calling it a deficit for no apparent reason other than it’s a cross-border trade in which one of the items of value is dollars, doesn’t make it bad.

      1. Krugman “Nobel Prize” was for research showing that people in different nations trade red cars for blue cars more than they trade wine for sweaters.

  8. Every increase in foreign investment or lending here has to be accompanied by an equal increase in our trade deficit. It’s a simple accounting truism. A $50 billion increase in Japanese investment translates into a $50 billion increase in Japanese imports.

    What an “Ah, so”.

  9. Before people in Japan can make such an investment, they need American dollars, which are not printed in Tokyo. How do Japanese get American dollars? By selling goods or services in the United States.

    Every increase in foreign investment or lending here has to be accompanied by an equal increase in our trade deficit.

    Chapman is a complete idiot. That is not how it works. The fact that investments in America must be made in dollars doesn’t mean that such investments can only be made with money made selling things in America.

    This is so wrong, I don’t even know where to start. This is embarrassing. This is the most embarrassingly wrong thing Reason has ever published.

    1. “This is the most embarrassingly wrong thing Reason has ever published.”

      Go back and read some more articles. This is on par with a lot that has been published lately and it is pretty consistently the same authors.

      1. Trumps success was partly due to promising a better economic outlook for American workers.

        Democrat C plan: undermine this with meaningless narratives that don’t survive scrutiny.

        Democrats cannot have Trump pull off better economic times when Democrats have been promising that for decades and never come through.

        Democrat A plan: Scream and cry until tears run out
        Democrat B plan: Unleash the fake news 24/7 and not even try to be objective journalists.

    2. No John, you have to explain 2 + 2 = 5 before you can discuss its effects.

      1. That is not 2+2=5 you idiot. The Japanese or anyone else is free to invest whatever money they like in this country. It doesn’t have to come from selling goods here. Money is fungible you fucking half wit.

    3. Im trying to think of a way for Toyota to acquire dollars that did not involve someone selling something to Americans in exchange for U.S. dollars. I guess the FedGov/Federal Reserve could “print up” and give $50 billion directly to Toyota, so that the company could turn around and invest it in the U.S. Otherwise, even if Toyota got its dollars from, say, Myanmar, it was because the people of Myanmar acquired the dollars through selling Americans stuff.

      Chapman was therefore using shorthand, if you will, to describe how Toyota acquired its dollars to invest.

      It doesn’t change the fact that Toyota’s investment will increase the U.S. “trade deficit” with Japan. That’s how the accounting works. The U.S. ran a perpetual trade deficit with Great Britain for most of its early years, since wealthy British investors were putting their money into our railroads, coal mines, etc.

  10. “Steve Chapman explains…”

    I doubt that.

    Question: What kind of protectionism do out trading partners practice?

    1. “Steve Chapman explains…”

      And Criswell predicts…

    2. If getting other countries to invest in this country was some kind of a zero sum game, it would be impossible to ever run a trade surplus. I don’t understand how someone could be as stupid as Chapman appears to be. Words really fail at how bad this article is. Understand, the problem isn’t Chapman’s objection to tariffs. The problem is he has no understanding of even the most basic aspects of international trade.

      1. Trade surpluses are no more real than trade deficits. Get thee back to 2 + 2 = 5 before going any further.

        1. yes they are you fucking idiot. Have you ever heard of borrowing money? Just because the books balance doesn’t mean that one side can’t be in debt to the other.

          Stop talking about this subject. You don’t know anything about it. Just stop it. It is embarrassing.

        2. Lets say in a given month, we buy $12 billion more in goods and services than we sell to a given country. That money has to come from somewhere. We have to pay for it. And it comes in the form of either borrowing, printing money or from a trade surplus we run with another country. The books balance. They send us $12 billion more in goods and we send them 12 billion more in currency. The surplus is meaningful because that money has to come from somewhere. And the money is constant. It doesn’t get consumed. What we buy from them gets used and depreciate or sometimes be used to make something else more valuable. It all depends on the circumstances. But it is not meaningless.

          1. Nations don’t trade; people do. All the stuff being shipped to us from China has been purchased by individual Americans, not the U.S. Gov’t.

            That Americans are using borrowed money to purchase Chinese goods has no bearing on the size of the “trade deficit/surplus”. Americans could be using accumulated savings to pay for the Chinese stuff, and we would still have a “trade deficit”.

          2. Re: John,

            Lets say in a given month, we buy $12 billion more in goods and services than we sell to a given country.

            Now, let us all say “Countries don’t trade! Only individual humans of will trade!”
            It does not matter that Americans buy more products from Japanese producers than what Japanese producers buy from Americans. The preoccupation with that situation is completely irrational. It is part of what is called the “Macroeconomic Fallacy” where people think in these arbitrary lumps rather than looking at the actual economic actors.

            We have to pay for it

            What’s with this “we” business, Kemosabe? *I* pay for the things *I* trade. I never had a problem. What’s your problem?

            1. Um…..not sure if you ever noticed, but governments buy all kinds of shit. Those aircraft carriers, paper clips, etc. all came from somewhere. Tey are also not free.

  11. The bottom line is the reason we have issues in our trade deficits and the economy as a whole can all be boiled down to government intervention both in the US and foreign. From the Great Depression to the Great Recession it is all because of the intermingling of government in the private sector. Unfortunately, most people do not understand the basic principles of the free market.

    1. Yes and no. Depressions happen on their own as well. Indeed, the entire reason government has gotten so involved with the economy is because it mistakenly believes it can somehow repeal the business cycle.

      Don’t let the fact that government interventions can cause downturns cause you to think they are the only thing that cause depressions. Depressions happen in the free market and they are often nastier in the short term than our government causes downturns. The difference is they don’t last as long and the resulting recovery is much stronger.

      1. Depressions and recessions is the markets way of correcting. I do agree that recessions naturally occur on their own but most people believe that injecting an insane amount of money into “too large to fail companies” (corporate welfare) is a great thing.

        Another thing to consider, have we ever had a true free market?

        1. In the 19th Century. And we had depressions in 1837 and 1893 which were much nastier than the one in 1929. We just don’t remember them because the government didn’t intervene and they only lasted a few years instead of a decade.

          1. 1929-1942 was the period of the Great Depression. 23 years. Some might even say 1945, because until then income was set low and there were few commercial items for sale. Nearly everyone was privately employed or in the military.

          2. Re: John,

            In the 19th Century. And we had depressions in 1837 and 1893 which were much nastier than the one in 1929.

            The 1929 depression would’ve ended within the same time frame if Hoover hadn’t intervened with his recovery programs, his massive tax increase and especially without imposing the ill-advised and horrible moot-Hawley Tariff. Harding and then Coolidge did not intervene during the 1920-1921 depression which was the result of years of inflation to pay for the war efforts and keep the Allied governments propped up, yet was completely over by 1921. Coolidge tax decrease and fiscal surplus resulted in 8 years of steady industrial and commercial growth not seen anywhere else.

            1. Hoover and Congress directly caused the Crash and Depression by using tax law asset forfeiture to enforce prohibition laws that made beer a felony. The Smoot Hawley tariff changed almost nothing but sugar rates (sugar makes alcohol) and search & seizure rules for narcotics (Europe produced heroin and dumped it in Asia and Africa). What mattered was Bank of America being indicted in September 1929 for financing smuggling, and glucose and yeast producers being indicted for prohibition conspiracy. Those trials dragged out during the entire Hoover Administration.

              1. You missed the Revenue Act of 1932.

            2. Hoover’s programs were more like witness protection for banks helping the feds bust glucose and industrial alcohol bootleggers. Hoover also wanted to force Germany to quit exporting heroin, but the Accursed Hun needed the money to pay reparations to its competitors France and Great Britain. Hoover’s Moratorium on Brains stopped the other WWI belligerents from collecting (and allowed rearmament and buildup of the National Socialist Party)

          3. The Chinese Empire banned British importation of Indian opium in 1837. The depression was caused by England liquidating investment Stateside to attack a much larger nation on the other side of the planet. The record has been rectified by US Thought Police but Australian papers on Google News Archives contain the info. Everything about 1893 was caused by government action. Search for “Reversing Socialism” and “Income Tax depression 1893-1898” at libertariantranslator for starters.

      2. Re: John,

        Yes and no. Depressions happen on their own as well.

        Mauser is talking about Depressions that last more than a year. A regular recession gets sorted out very quickly as long as the government does not interfere with the liquidation of bad debts. Sure, recessions are nasty for those whose capital or savings were invested in overly optimistic projects but that does not mean government interventions are less destructive, because they’re much more insidious.

        Depressions happen in the free market and they are often nastier in the short term than our government causes downturns.

        You’re now sinning of conflating two different things yourself, John. A recession or depression is the liquidation of bad debt which is the result of previous expansions in the money supply by fractional-reserve banks, but whether it is to stimulate the economy or “lessen” the impact of a recession through massive interventions, the government CAN and DOES make things much worse.

        1. Adam Smith understood–and wrote–that depressions (the ruin of nations) were in EVERY case the work of government, and NEVER of private parties, for only the political state has unrestricted use of deadly force at the fingertips of the visible but conveniently forgotten unproductive hands of its parasitical minions.
          Every single Depression in These States has borne this out. China banned opium in 1837 and the Brits withdrew investment capital to finance their Opium Wars. The panic of 1907 was largely because of government redefinition of whiskey and honest labeling of morphine under the new Pure Food law–when rampant prohibitionism spread across the South. Silver coinage, high-tariff opium regulations, Chinese Exclusion and the communist income tax simultaneously caused the Panic of 1893. The Prohibition Amendment made the Glucose Trust and yeast factories rich, then tried to confiscate that wealth using the commie tax. Recent crashes and depressions were no different. Does anyone expect the looters to admit it?

        2. Both of those lasted more than a year. You are fucking moron Mexican. Stop polluting the world with your ignorance. You are unworthy of talking about this subject. As someone who does know this topic, I find it insulting and infuriating to hear you even speak of it. Shut up you fucking angry retard.

      3. Depressions happen in the free market…

        They happen because governments fiddle with the banking system and allow banks to get away with loaning more money than they actually have on hand.

        The perceived size of available savings (which is, in fact, smaller than it is perceived) induced more firm’s to borrow and invest in longer-term projects (building a factory, etc.). At the end of the cycle, it becomes clear that the available savings were not as large as first assumed, it becomes necessary to liquidate the bad investments–which is the time period we refer to as the recession or depression.

        If the govt refused to bail out the banks that had been loaning money they didn’t have, then the banks would have been disciplined (those that remained in business, anyway) into maintaining an appropriate reserve of money for the purpose of lending.

        1. Depressions happen because God Reveals to ignorant bigots that beer (cigarettes, whiskey, hemp, coca, LSD, whatever) is the Gateway to Demonic Possession. To protect the innocent, men with guns must rush out and shoot people in the back while the Political State confiscates their dope, corn sugar, wort, breweries, homes (especially under subprime mortgages), bank accounts and securities holdings, and other real and chattel property. When investors see this coming, they liquidate stocks and empty bank and brokerage accounts. Credit collapses. Herbert Hoover crashed the economy because Congress made beer a felony, and the Bush dynasty did it because Congress made everything EXCEPT beer a felony–and relied on asset forfeiture to rob civilians as collateral damage in their War on Everything Enjoyable.

  12. When Obama actually did absurd things, the media gave complicated explanations for them. Obama was playing 3D chess, and we were hopelessly dated for criticizing him using pop economics from the Reagan era.

    When Trump merely says the things he says, he’s assumed to be even dumber than Obama’s actual actions were.

    Progressives and the media became obsessed with words and posturing over the course the Obama administration, but what politicians say is mostly pandering. Who cares if Obama says he loves Afghan babies if he’s killing them by the dozen in drone strikes? Who cares if Obama says he wants working people to have affordable quality healthcare if his solution breaks the healthcare system?

    If and when Trump actually does things that are anti-free trade, I’ll be here to call him out on it, but until he becomes President, most of what he’s said appears to be what he needed to say to get elected. If Trump were an ideologue, what he said about what he believes might be more important, but he’s not an ideologue.

    1. Listen up, libertarians, God’s own birth-forcers now call Milton Friedman’s Free to Choose “pop economics from the Reagan era.”

      1. I was lampooning progressives.

  13. Throughout his presidency, I expect Trump to tweet the same things he said during his campaign on trade. I plan to focus on what Trump actually does, and I’d encourage journalists everywhere to do likewise. Want to focus on what Trump actually does? You can start with the observation that Trump uses twitter and his public statements to distract his opposition through the media. He uses twitter to make the media to go play fetch.

    Don’t be easily distracted by what Trump says. What Trump says isn’t important. What Obama said wasn’t important. When Trump really makes some big mistakes on trade or something else, I hope the media isn’t off somewhere talking about something he said as if what he says is important. If he liberalizes trade, it’ll be under the guise of restricting it–would you criticize an action that liberalizes trade just because Trump says he’s restricting it?

  14. So, do I listen to the billionaire who actually engages in foreign trade–or Steve Chapman and his quasi-leftist buddies who keep letting him publish at Reason?

    I think that Trump is against ‘free trade agreements’ that empower bureaucrats over businessmen and allow artificial manipulation at those bureaucrats will.

    1. So we should listen to George Soros as well?

      Additionally, Trump does not support free trade. He supports protectionism. It is apparent in his proposed solutions which include slapping on tariffs and punishing companies that move abroad. This is completely different from people like Ron Paul, for example, who criticizes NAFTA on the grounds it’s not really free trade and subsequently advocates for getting rid of tariffs, quotas, anti-dumping laws, etc.

    2. Re: Azathoth!!,

      So, do I listen to the billionaire who actually engages in foreign trade[…]

      […] And then lies about trade itself? Yeah, you can listen to whoever you want. It’s your funeral.

      To put matters in perspective, it was Pence who let the cat out of the bag when he quipped, unabashedly, that America has lost by letting the free market sort things out. It was conservative radio talk show host Laura Ingraham who called “tariffs” a great tool to fix “market failures”. These people are true and true Fascists who were waiting for the “right” man in office, the man who will make the trains run on time.

      I think that Trump is against ‘free trade agreements’ that empower bureaucrats over businessmen

      What you think is irrelevant. What is relevant is what El Presidente Trumpo has said and done. The Carrier deal does not bode well for us who believe in free markets, free movement of goods, capital and labor. In Freedom, to put it more succinctly. While trade deals are contradictory in themselves, what they do bring is a general lowering of tariffs that benefit the Consumer.

  15. How do Japanese get American dollars? By selling goods or services in the United States.

    I hope this is the stupidest thing I read all day. Because its really fucking stupid.

    Anyone who has travelled to another country knows that you don’t have to raise local currency by selling stuff to the locals when you get off the plane. Just like you can get local currency by exchanging dollars for it, the Japanese can get dollars by exchanging yen for it.

    Every increase in foreign investment or lending here has to be accompanied by an equal increase in our trade deficit. It’s a simple accounting truism. A $50 billion increase in Japanese investment translates into a $50 billion increase in Japanese imports.

    I’m going to have a permanent palm imprint on my face. Aside from confusing capital investment (“investment”) with operating income (“imports”) (which is the opposite of an accounting truism), he botches the actual transactions. Let’s say a Japanese company has no sales in the US, but a $50BB surplus they want to invest here. They buy $50BB of dollars (exchange yen for dollars, same thing), and buy a bunch of assets. All they have sold to us is yen. Not one good or service need change hands, yet here they are, with a $50BB investment in the US.

    1. And a U.S. “trade deficit” with Japan, in the amount of $50 billion.

    2. Re: R C Dean,

      I hope this is the stupidest thing I read all day. Because its really fucking stupid.

      It’s not. It’s the truth.

      Anyone who has travelled to another country knows that you don’t have to raise local currency by selling stuff to the locals

      Ohh, boy. How has El Presidente Trumpo made everyone dumb. Of course if you’re a traveler you’re going to trade your dollars for local currency, but what Japanese manufacturers want the dollars for is not to go visit Disneyland but to have those dollars through trade. Money is still the representation of previously-produced goods and services. YOU have money because you produced goods or services which you traded for that money. The same with these Japanese companies: they want to trade their goods for those dollars.

      They [Japanese investors] buy $50BB of dollars (exchange yen for dollars, same thing), and buy a bunch of assets.

      How do you think the bank that sold them those dollars got those dollars, if one is to believe these imaginary Japanese investors wanted to buy US assets?

    3. None of this is particularly complex so long as you remember that currency is a type of commodity.

      Granted, it is a commodity with a rather unique set of characteristics, but the principle that it too is bought and sold on markets still applies.

  16. Trump hasn’t even issued a single policy and Chapman is already sure the policies are bad. Sounds legit.

    It’s like Chapman has never actually negotiated anything. You don’t concede everything before you even open negotiations. In fact, sometimes, you put your counterpart on the defensive with aggressive opening moves.

    Also, don’t trust the names of agreements. Just because something is labeled as a “free trade agreement” doesn’t mean it is. If it was really a free trade agreement, it wouldn’t need to be hundreds of pages long.

    It would seem to me to be prudent to at least wait until Trump starts actually negotiating a trade deal before we declare the deal bad.

    1. Re: Cloudbuster,

      Trump hasn’t even issued a single policy

      STOP EQUIVOCATING! El Se?or Presidente Bananero Trumpo hasn’t implemented a single policy – the correct word – but he has talked about the policies he intends to implement time and time again throughout the campaign and through multiple interviews.

      Just because something is labeled as a “free trade agreement” doesn’t mean it is.

      Ok, so they’re not “free trade” agreements ( you don’t need an agreement to have free trade). I’ll answer that with a big, fat “So What?” Those agreements lowered tariffs and other protections which benefited the American consumer. If your problem is with the disappearance of the Buggy Whip industries and the woes of the imaginary “American Worker(TM)” which has become the patron saint for all protectionist causes, the answer to that is Boo Hoo Hoo!

      1. STOP EQUIVOCATING! El Se?or Presidente Bananero Trumpo hasn’t implemented a single policy – the correct word – but he has talked about the policies he intends to implement time and time again throughout the campaign and through multiple interviews.

        …. aaaaand you’re still playing in two dimensions in a three-dimensional game.

      2. Christ you sound sooo much like the Diane Rehm show today, where they spent an entire hour discussing the impending fascism of Donald Trump.

        Is this what passes for the Bargaining Stage of grief over Trump’s election?

  17. Look, the GO-Pee was entirely taken over by faith-based ku-klux bigots nobody would vote for–not after their asset-forfeiture prohibitionist prez completely wrecked the economy ? la Herbert Hoover and Bush Daddy. So along comes a crowd-pleasing persuader to sell that ghastly Mein Kampf platform to voters, and he pulls it off thanks to the econazis.
    So all Trump had to do was have a friendly phone chat with the elected Democratic Progressive Party lady president of Taiwan (who enforces their death-sentence for marijuana laws)–and Red China comes unhinged! Faith-based electors are suddenly turning faithless? Hamilton lost the duel fair and square. What These States need are unbridled McBride electors to cast their votes for Gary Johnson the way Roger McBride cast his electoral vote for the pro-choice libertarian ticket of Tonie Nathan and John Hospers. The Supreme Court ruled that women have individual rights (Roe v. Wade) within a month of that single electoral vote being cast. If any GOP electors believe in individual rights, now is their chance to vote libertarian and ditch National Socialism without losing or upsetting most voters.

  18. Two men are walking through an orchard. The first man picks an apple off a nearby tree, while the second man takes a pear from another tree. Each decided he prefers what the other has, and they trade, apple for pear.

    Which man has the trade deficit?

    1. Both ? the first man is one apple poorer and the second is one pear poorer.

      /Marxist

  19. We must realize that everything we read about Trump is not exactly the entire truth. Some of the things he says is for leverage to be used at a later time. I doubt congress will pass a single tariff and everyone, including Trumps knows this to be true.

    Yes Japan needs US dollars for which to invest but they already have them. They are running a massive trade deficit with the US and much of it is to buy oil from other countries not the US. Remember, oil is traded in dollars so it isn’t exactly true when you say Japan needs to export to the US so they can invest in our country. They need to export to the US to buy massive amounts of oil, as so with all the countries in the world. Unfortunately, they are not buying the oil from the US thus the huge trade deficits. All Trump wants is for them to buy some US products even our oil or natural gas.

  20. As he pushes Unconstitutional Trade Deals to ship US jobs and undermine
    US sovereignty – Obama twice tells group in Laos that Americans are ‘lazy’

    http://www.theamericanmirror.c…..more-18543

  21. De-Nationalize and Globalize at the Expense of Working Families in America..
    It seems that fundamental changes are occurring around the globe, driving countries to de-nationalize, to destroy their sovereignty, and to globalize under the guidance of the same U.N. elites who know what is best for an “overpopulated planet” that is going to be destroyed by a manufactured global warming Armageddon. Giving up sovereignty to an international body such as the United Nation, or to a transnational entity like the European Union, or to a partnership such as the Trans-Pacific Partnership (TPP).
    “The TPP would allow foreign corporations to sue federal, state and local governments in an international tribunal for passing an increase in the minimum wage or any other law that could hurt expected future profits.
    Corporatist globalists win all around because of lower wages and job redistribution overseas where regulations and anti-pollution measures are lax or non-existent which allows them to pollute away. This flies in the face of their so-called concern for the environment and for green growth much touted business model.
    The experimental global change to de-nationalize, to devolve us into multi-nation “partnerships” in the name of free trade, and the fundamental transformation of western societies will have deep and long-lasting consequences for generations to come.
    http://freedomoutpost.com/de-n…..n-america/

  22. Chapman invokes economics when it suits his fancy (to bash Trump) but not when it doesn’t. He’s all for “free trade” (even when foreign production is subsidized or the foreign country has it’s own trade barriers) based on free market principles, but throws those principles out the window in order to coerce businesses to hire and trade with all, without regard to their willingness to associate with others based on criteria (such as ethnicity, religion, or sexual orientation) that he views as irrational. (Similarly, his dedication to rationality is selective, which he does not apply when touting his “creative design” nostrums.)

    Japan doesn’t have to import stuff into the US in order to invest in the US. They can sell their gold, or sell their manufactured goods too other countries, or take out loans.

    Even though foreign producers often have lower labor costs than in the US, we don’t need to import foreign goods to take advantage of that. We can import foreign labor with work-only visas (no voting rights or citizenship) and abolish the minimum wage.

    Steve. please go back to school and learn economics. If you’d like to become a libertarian, I’d be glad to provide an introductory reading list.

  23. Oi. The argument that trade deficits have no meaning is sooo ridiculous. It is true that both parties perceive that they are getting something of equal value from the trade. Not disputing that. I like my tennis shoes more than the $50 I spent. I GET IT. It is also true that at some point the other country either has to spend the money back in the USA, OR just sit on it forever which is a dumb thing to do, which is why they generally spend/invest it.

    What everybody misses out on here is that them buying assets back in the USA over a long period of time is BAD NEWS. What that results in is foreigners owning all of the assets of the USA, while US citizens own fewer of the assets. Assets generally produce income, so foreigners have used their trade surplus to purchase US assets, which then produce them more income… In other words a nation that runs a large deficit on a long term basis slowly turns into a nation of slaves where foreigners own all assets of value within the country because they had to spend the money in the US.

    Back when the world had hard currencies countries stressed about the trade deficit they ran with other countries BECAUSE THEY COULD LITERALLY RUN OUT OF MONEY. Then no more importing, AND since you were importing a lot of stuff you’d have no domestic industry to even fill that need until it came into being by absolute necessity AFTER you ran out of cash.

    1. To make things simple let us imagine a world of 3 countries. All of them have an annual GDP of $100 at the beginning of the scenario, and a net worth of say $2,000 (20 times earnings, which is not far from many investments actual value on the market).

      Let’s say country one and two each spend $20 a year of their income on goods from each other. They’re trade balance neutral with respect to each other. Now let’s say they both also import $20 a year worth of goods from country three. Now let us say that country three decides to import $30 a year from both of these countries. That leaves country three with a trade deficit of $10 a year each with country one and two, and $20 a year total.

      Now following logic countries one and two must either sit on the currency from country three, or spend it. They COULD choose to try to import more stuff from country three, but there just aren’t enough desirable products, that’s why they’re running the surplus in the first place! So instead they decide to invest in country three. They buy domestic factories, real estate and so on.

      At the end of the first year it’s no big deal really. Country one and two now own $20 of the net worth of country three. Who cares? But let us look forward 10 years. Assuming they continue this static trade surplus of $20 a year, and then get a return on their investments within country three of 10% a year on assets they previously purchased, the math would look like so:

    2. 22
      46.2
      72.82
      102.102
      134.3122
      169.74342
      208.717762
      251.5895382
      298.748492
      350.6233412

      So at the end of a decade they own 17.5% of the assets in country three, which means the locals in country three own 17.5% less of their own nations assets. What about after 20 years? The foreigners would own $1,260.05 of the nation’s $2,000 net worth. Incidentally that now means the net worth of countries one and two are actually $2,630.025 each now since they own the assets in country three, and their GDP would in fact be higher than $100 annually as well. The locals in country three now own only $739.95 of the net worth/assets of country three, because they consumed more than they produced for 20 friggin’ years like morons, and traded their net worth/assets for current consumption goods.

      Now obviously we’re not running a deficit THAT large, and there are other complications to the math like economic growth rates in the domestic economy etc… However it should be clear that with foreigners buying assets in the country with the deficit over a long period of time it would eventually impoverish, or at least slow down wealth/income generation in the country running a deficit.

    3. At the fundamental level it is a difference of being a saver/investor vs a debtor/consumer, but at a national level. Most people in regular life are consumers… But it is the saver/investor that becomes wealthy at the expense of the short sighted, and the consumer merely treads water, or perhaps meets a bad end if he over consumes and saves/invests literally nothing at all. This is the difference between being Warren Buffett, or being the high income doctor who spends every dime he makes on fancy shit that depreciates in value and invests nothing, while running up debt in advance of his income to boot.

      Now I’m not hocking any particular easy fix here, but over the long haul unless you’re planning on hyper inflating your currency away to stiff foreigners who own debt or nationalize all foreign owned assets or something… It’s not a good idea to be on the debtor side of this equation. You’re trading your future for current consumption that you cannot support with your productivity. In the USA I would almost state it as we’re spending our PAST domination and asset accumulation and future productivity/income both for current consumption.

      How to fix it? Produce more things that foreigners want to buy in a free market? Reduce red tape and regulation to encourage REAL business competitiveness. That’s the best way. However what if you CAN’T compete in enough areas to ever balance it out, due to insanely high wages in your country? Well shit, I dunno.

    4. That’s basically where we’re at. We will either destroy ourselves financially and lower our standard of living until we can compete with foreign manufacturers, and hence balance things out in a free market type fashion (we’re helped in this by the fact that the exporting countries are rising in their standard of living, hence we don’t have to go down to current Chinese levels of income, but will likely “meet them in the middle” perhaps), or we’ll have to default and stiff everybody or something. Or perhaps just have all assets owned by China, but still have decent wages, but little actual asset ownership by native citizens? I dunno.

      I don’t LIKE meddling with the free market economy, but I DO know that a lot of countries slap high tariffs on our shit, which we don’t do on their shit. That just seems unfair and stupid. You want FREE trade, then let us have FREE trade. Not one sided/manipulated trade that is specifically against our own productive sectors. I get that we receive the short term benefit of getting a cheaper thing that we find enjoyable (like my TV!), but is it REALLY the best long term for the country as a whole?

    5. To me it is a lot like the argument of an individual getting a “benefit” out of enjoying buying sweet shit on their credit card because they can afford the monthly payments… You may be able to afford the monthly payments, but every month you’re losing a little bit of your net worth by running up THAT deficit, and ultimately you’re paying interest out to the card company (similar to lost returns on assets purchased by foreigners) and at some point the piper must be paid… Unless you’re going to skip town AKA default on debt, seize foreign owned assets etc.

      I don’t have the answers, but I do know it IS a problem over the very long haul. Not in the short term, but on the scale of decades it becomes an issue. There are already trillions in foreign owned assets in the USA, and by necessity that number is going up by hundreds of billions a year. I dunno about you but I wouldn’t like the day when 90% of commercial real estate, or 90% of our stock market was owned by China…

  24. As far as our actual real world situation we’re in, I don’t believe our deficit is so bad as to actually be having us lose overall real net worth every year as a nation due to our GDP growth offsetting it… But we’re essentially in the position of being the guy who can still afford the monthly payments on the credit card right now, so it’s totally fine to keep charging stuff to it, and we think everything is hunky dory. Maybe we’re going in debt $500 a month on the card, but still socking away $750 a month into our 401K, but we’re still fundamentally acting like debtors instead of investors. Never a good idea. I will always prefer to be a lender versus a debtor, and any sane long term thinking person should agree.

    1. Perhaps we can pay off the debt by having the government demand tribute from foreign nations.

      1. Unnecessary, but if you’re referring to Trump saying we should make other countries pay for the defense we currently provide them… Instead of paying for us keeping bases there, I’d say we cut the bases and lower the spending. We should cut the budget by not subsidizing the national defense of a bunch of the worlds richest nations just because we’re a little richer. I’m pretty sure Japan, South Korea, and Taiwan can afford to buy their own fighter planes, aircraft carriers, tanks etc to hold shit down in their neck of the woods against China and North Korea. Especially since India and several other countries in Asia are also a little weary of China.

        Europe with it’s combined EU GDP of 17.1 trillion per year ought to be able to fund defense against Russia with its 1.2 trillion per year GDP… Not to mention the NON EU countries that are anti Russia.

        So stopping subsidizing their defense would be a good start to shaving government spending. Of course if any real shit ever went down we could always leap in on the side of right, but there’s no reason to permanently spend hundreds of billions of dollars defending those countries when they should be doing it themselves.

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