Free Trade

America's Trade Deficit With China Just Hit a New Record

And it's not a record low. That's fine, but it's not what the president said would happen.

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Beck Diefenbach/REUTERS/Newscom

The Trump administration's protectionist trade policies were supposed to reduce America's trade deficit with China—or, at least, that's what President Donald Trump has repeatedly claimed—but new data shows that the gap between how much America imports from China and how much it exports to China hit a new record high at the end of 2018.

China's trade surplus with the U.S. was $323 billion in 2018, according to figures released this week by the Chinese government. That's a 17 percent increase from 2017. China said that its exports to the U.S. grew by 11.3 percent during 2018 (despite Trump's tariffs), while imports from the U.S. climbed by only 0.7 percent last year.

American data on trade was supposed to be released on January 8, but has been delayed due to the government shutdown. Alan Reynolds, a senior fellow at the libertarian Cato Institute, says the Chinese numbers may actually underestimate the growth of the trade deficit during 2018 (China's numbers sometimes exclude goods that end up in the U.S. after passing through other countries), since American data from March through October shows a larger jump in American imports.

Source: Cato Institute

Regardless of the final figures for 2018, it's pretty clear that America's trade deficit with China has jumped upwards in the two years since Trump has been president.

That probably has little to do with Trump or his trade policies, of course. The fact that American consumers and businesses are buying more things from China likely has more to do with the strength of the American economy over the past several years and increasing industrial capacity in China. As The Economist's Simon Rabinovitch, who tweeted the above chart, noted on Monday, the jump in the trade deficit could also reflect Chinese front-loading of exports in advance of Trump's tariffs. Either way, it should be clear that there are many other factors beyond Trump's control that dictate the size of America's trade deficit with China.

It's also something that's not really worth worrying about. As economists have been reminding us for months—including, by the way, Gary Cohn, Trump's former economic advisor, who left the White House after unsuccessfully trying to prevent Trump from imposing tariffs—trade deficits aren't a big deal. In the case of the U.S. and China, America's trade deficit is almost entirely canceled out by an investment surplus. In other words, America is a good place to invest money and China is a good place to build things. Free trade between the two countries helps both economies do what they do best.

In fact, running a trade deficit with China is probably good for the American economy. As Mark Perry, an economist at the American Enterprise Institute and editor of the think tank's Carpe Diem blog, has demonstrated, "increases in the U.S. trade deficit are associated with rising, not falling, employment levels in the U.S." A booming economy and high levels of personal consumption are a recipe for a trade deficit, writes Daniel Drezner, a professor of international politics at Tufts University. Those are things that most presidents would be thrilled about.

It's also worth keeping in mind that the trade deficit isn't something that the leaders of two countries can really negotiate. Sure, governments can impose policies that favor or disfavor trade, but the existence of a trade surplus or deficit is the result of millions of individual decisions made by businesses and consumers in the United States and China.

None of those exchanges are forced. American consumers and businesses voluntarily trade their dollars for imported goods. Cutting off that trade, Trump has argued, would "save us a hell of a lot of money," but that really misses the point. You'd save a hell of a lot of money if you didn't buy groceries every month, but you probably wouldn't be better off.

The economic data regarding the trade deficit shows that Americans have little reason to fear imported goods from China, and highlight once again how Trump's trade policies are failing to achieve their goals—while continuing to cause significant pain for American businesses in the process.

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149 responses to “America's Trade Deficit With China Just Hit a New Record

  1. Making Trumps point for him.

    1. If you fail to understand even a bit of all this, sure.

  2. This is mostly the result of our ballooning national debt. China lends us money to spend on their products. It’s all fun and games until the kids realize we sold them into slavery to Asia. (Yes China knows the Talmud better than most rabbis.)

    1. (lol) How much does the federal government buy from China?
      Your ignorance of the national debt seems related to Trump’s ignorance of trade balances.
      It all seems so appropriate.

      1. Fuck off, Hihn,

        1. (lol) How much does the federal government buy from China?

          1. Fuck off, Hihn.

            1. Raging goober INSISTS the federal government buys trillions from China.
              “On no evidence” as we say about Trump’s bullshit.

        2. Is it really necessary to call out every suspected Hihn sock? Are socks calling out socks?
          Socks all the way down. I am beginning to think there are only like 4 actual human regular commenters here.

      2. Let alone ignorance of the Talmud.

      3. What do you think they do with the dollars? It is either parked in Bonds or invested in shit they can buy and own, like companies. Both give you political leverage if necessary, but of course conflating economic activity with political activity is too hard for most of you all. It is almost like you have selectively forgot the countless times military action has been conducted to safeguard investments or other such activities, but hey they must have been old fools who did not have this new hip way of thinking that economics are separated from politics.

        1. Yup. WHO owns the assets MATTERS. And Americans own fewer and fewer assets of value in our own country, because we’re selling things like skyscrapers, major corporations, etc to pay for bobbles like tennis shoes and bluetooth speakers.

          It’s all fine and well to trade, but people who pretend trade deficits aren’t indicative of economic issues in the country running in the red are idiots. We’re fundamentally producing less than we’re consuming… And if you do that you’re forced to sell off assets. Not good long haul.

      4. Essentially, we “balance” our trade with China by exporting Treasury bonds. That is the Chinese “investment”. If we did not have all that debt for sale, China would have to use it’s surplus trade dollars to buy US products – either that, or wallpaper the Great Wall with pictures of US presidents.

        1. There seems to be sone misunderstanding running through this comment thread as to the relationship between the US trade deficit with China – driven largely by a combination of consumer & wholesaler decisions in the US & the Chinese’s massive store of cheap labor – the Federal budget deficit – driven largely by politicians racing to promise more & more services without raising tax revenue accordingly, instead financing those services through foreign debt (a great deal of which has been purchased by the Chinese government). Of these two issues, the debt issue poses several substantial threats to the national & economic security of the US – however, th e fact that China holds the debt is arguably one of the less concerning issues in play. It is true that the Chinese carry such a massive share of US debt that they could theoretically destabilize the US economy by taking action that would result in the US debt rating being dropped, for example. However, such action would radically devalue Chinese investments in the US debt market (of which their obligations are many with myriad term limits). They couldnt simply demand immediate repayment on their debt *and* collect the total money they are owed. More realistically, such a dramatic action on the part of the Chinese would almost guarantee that the US would do everything in its power to derail Chinese investment.

          1. On top of this, the entire Chinese economy currently depends on the existence of a US market to purchase the cheap manufactured goods the Chinese produce. The Chinese domestic market for such goods is growing, but its doing so slowly & IMO the Chinese will never create a flourishing domestic economy without full economic liberalization (see: Communism, failures of). The point is that the trade imbalance prevents the Chinese from weaponizing the debt. It is ironic to note that so-called economic populists who seek to eliminate foreign trade with China out of national & economic security concerns in reality make it much more likely that a catastrophic financial showdown with China will occur (although the Chinese still have good reasons to tread carefully with the debt absent the manufacturing issues).

            The larger lesson that can be taken from this example is one that is central to libertarian philosophy vis a vis markets & national or even human diplomacy: the more two nations engage in trade, the more driven they are by self interest to refrain fro m engaging in war. A similar dynamic plays out at the personal level: its likely everyone reading this has worked alongside or for a complete asshole they wouldnt have anything to do with outside of work – but your own economic selfinterest drives you to spend substantial amounts of time cooperating with said asshole. This is the invisible hand, folks. Libertarianism 101.

            1. You’re more or less right. But consider this:

              China is becoming less and less dependent on exports. When they hit a certain point, they may well be able to survive, and do fine with no US exports. At such time, should they be willing to perhaps have a mild, or even fairly severe recession… They could tank the entire US economy.

              People in the modern west have this stupid idea that money or GDP or whatever is the most important thing. You can never hurt the economy to accomplish some other goal, that’s madness! … But historically that’s been EXACTLY what nations did ALL THE TIME. And there’s no reason to believe China might not be willing to do that in the future.

              “Oh noes, we lost 5 trillion dollars in value. Oh well, we just tanked our only global competitors entire economy, sent them into a massive depression, and they’re on the brink of civil war over the fall out… Thankfully we’re here to pick up the pieces and become the sole global superpower!”

              It’s not unthinkable. If anybody is down for playing a game like that in the world today, it’s the Chinese.

            2. “It is ironic to note that so-called economic populists who seek to eliminate foreign trade with China out of national & economic security concerns in reality make it much more likely that a catastrophic financial showdown with China will occur (although the Chinese still have good reasons to tread carefully with the debt absent the manufacturing issues).”

              Some truth in this, but it totally neglects the massive boost their economy is gaining by the massive infusion of investment, both intellectual and economic and material, to their economy trade with the USA brings them. There are also other second and third hand effects to consider here you are neglecting with this line of thought.

              “The larger lesson that can be taken from this example is one that is central to libertarian philosophy vis a vis markets & national or even human diplomacy: the more two nations engage in trade, the more driven they are by self interest to refrain fro m engaging in war.”

              WWI disputes this thesis. The world was more interconnected for both trade and investment pre-WWI compared to today and countries still blew eachother apart. Shit, the Royalty of Britain and Germany were related and still sent hundreds of thousands off to die. This is a nice thought but not one that would prevent a hot war, perhaps delay it, but not prevent it, if countries thought they could gain from conflict more than they would lose.

    2. “China lends us money to spend on their products.”

      ??? China lends you money? How does that work?

      1. Bonds.

    3. A trade deficit is not in itself a problem. What matters is WHY we have a trade deficit. Borrowing irresponsibly to finance the deficit can be a problem.

      1. Borrowing/selling off long term assets to finance current consumption… It’s like adding to your credit cards, while talking out loans against the equity in your home, so you can buy more tennis shoes… It’s fine to do that for awhile, but if you keep doing it forever eventually you end up broke, in debt, and with no assets.

        That people have somehow managed to believe this is a viable thing is beyond me.

  3. ANOTHER failure?

    1. Fuck off and die, Hihn.

  4. if are trade deficit is growing that must mean that America is doing better and requiring more. Its all a matter of is the glass half full or half empty

    1. I think the point of the article is that Trump doesn’t understand that a trade deficit is not bad on its own. Which puts him in the same camp regarding econ as the last half-dozen POTUS.

      1. A trade deficit can be an indicator that USA is unable to import goods into China easily. Which it is.
        Another reason is that American businessmen might not want to export goods to China… yeah right.

        Google is the most public example of an American company wanting to invest billions into China and make billions. China will only let google in if they create the Supreme Commie internet tool for subjugation.

        Boehm will never cover this problem in depth.

        1. “Boehm will never cover this problem in depth.”

          The problem is strictly China’s, not ours. Unilateral free trade benefits both parties.

          1. Unilateral free trade can benefit both parties.

            Multilateral free trade benefits all parties.

            1. Poor statist doesn’t understand Econ101.

            2. Petter the trolls just follows me around like a puppy.

            3. “Unilateral free trade can benefit both parties.”

              Unilateral free trade benefits both parties, regardless of imbeciles claiming otherwise.
              You may be trolled, but your stupidity deserves it.

              1. But it’s less good for both parties right?

                So if one nation has the oomph to force the other to open up and have bilateral free trade… Is that not a good thing?

                It’s a legit question. I think we have the power to force China’s hand, so I don’t know why we wouldn’t want to. The short term risk is next to nil, as evidences by this very report. We’ve barely done anything yet, and China’s economy is already feeling it. If we actually threatened to do something major, they’d come running to the table out of sheer necessity.

                1. “I think we have the power to force China’s hand, so I don’t know why we wouldn’t want to.”

                  Because there’s nothing to gain? What is it that you want from China lowering it’s restrictions? Nearly every large US company already sells their products there, nevermind manufactures them there. Do you just want the Chinese people to pay lower prices for them? That is very noble of you.

                  1. Are you really as dumb as you are acting?

                    Sure, most US companies can sell their products in China… After China slaps on a 25-100% tariff!

                    The fact is many American made products are VERY competitive globally. That is with almost every nation on earth tariffing the shit out of our products. We would sell dramatically more of a LOT of things into China if they removed or lowered tariffs to math what we charge them on most categories of items.

                    50 billion dollars in increased trade is 1 million $50K a year jobs. Since we have about 10 million fewer people working compared to pre recession, if you’re going by labor force participation rates, we could certainly use an extra couple millions jobs. This would happen naturally if we can get foreign countries to simply lower their tariffs, because we’re already competitive other than being shut out of markets by those barriers.

        2. Another reason is that American businessmen might not want to export goods to China… yeah right.

          Seriously though, why the fuck would I want to pay a bunch of rich Americans to manufacture widgets so I can then sell them to the poor Chinese? That’s the exact opposite of comparative advantage.

          Your problem is that you persist in this mercantilist view that the economy is limited to the rivalrous goods. But value is intrinsically and exclusively subjective, and people value non-rivalrous goods, and America does an excellent job meeting that market demand.

          1. ^+ more than 1

          2. What if there aren’t enough people with the intelligence to go into the very limited set of jobs that are “proper” for fancy economies like ours to be in? Because people with 85 IQs CANNOT be programmers or engineers, no matter how hard they try. What if you simply end up with millions of people unemployed, or working jobs that are even LESS productive than the bobble making jobs they used to have?

            In a welfare state, as we have today, I think it is conceivable that we’re actually paying MORE for bobbles made in China once all the socialized costs, and other odds and ends are factored in.

            1. “What if there aren’t enough people with the intelligence to go into the very limited set of jobs that are “proper” for fancy economies like ours to be in? Because people with 85 IQs CANNOT be programmers or engineers, no matter how hard they try. What if you simply end up with millions of people unemployed, or working jobs that are even LESS productive than the bobble making jobs they used to have?”

              Because manufacturing jobs are the only things people with low IQ’s can do? This is beyond stupid. Who knew the US had a “fancy” economy? Not me.

            2. This sort of job-market neo-Malthusian fear is nothing new. Indeed the same fears were advanced when agriculture began to be automatic (the cotton gin) and again when factory jobs began to replace agriculture. In each instance the poor grew wealthier in the end, and today unemployment is at historic lows.

              There are jobs other than engineering for the putative 85-IQers. Indeed, most of these, those menial, are probably better for health and quality of life than factory work, which is hardly a utopian ideal way to live one’s life, as most mercantilists and the generally nostalgic seem to imagine it to be.

              1. automatic = automated

              2. those = though

                I’ve been posted here for years and I still can’t remember to proofread before I post.

                1. Ugh. I’m not talking about 100% things. We haven’t lost 100% of our manufacturing, and never will. But the fact is that manufacturing is still a more important part of the global economy than trendy shit like saaay “tech” companies in the generic sense people use it in.

                  Other than bringing back middle class families having multiple servants over the next couple decades we may need to be able to have as many jobs employing not bright people as possible. We can’t literally have 60% of the workforce working as baristas you know… There are limits to how far borderline useless, low/no productivity service jobs can go. We already have 10+ million fewer people working than pre recession if you look at labor force participation rates. Even at modest salaries, say $30,000 a year, that’s 3 TRILLION a year in GDP we don’t have.

                  I hate how shallow thinking and black and white so many of you people are. I don’t think all jobs are going away, Malthus was an idiot, and I’m not a “the sky is falling!” guy. But to ignore the reality that it is POSSIBLE this time might be harder and faster than last time… Which DID cause massive disruptions itself… It’s just not considering all the reasonably possible outcomes.

      2. A “deficit” of any kind sounds like a bad thing. It suggests a lack of something. Combine that with trade deficit with China (or whoever), you then have someone to blame this bad thing on and get all fearful and self-righteous about it. We really need a more accurate word. Is a “trade deficit” really a deficit in trade?

      3. The most economically successful countries over the past century have been export-oriented economies running continual, positive trade surpluses. It is almost like there is a reason for this…

        1. Yeah, it’s because if you produce more than you consume, you become wealthier. It’s no different than for an individual. A person that produces more than they consume, and invests the surplus, will become progressively wealthier. A person who spends more than they produce will become in debt and penniless.

          Of course one shouldn’t live in a shack and consume nothing just to invest almost everything they make… But neither should one spend more than they produce. It’s about balance. We’re slightly into the spend more than we produce territory, which is not optimal. The deficit isn’t so large we’re going to be BK in 5 years or anything, but it’s not good.

          US citizens used to own more foreign assets than foreigners owned in US based assets… That number is now reversed. More foreigners own US assets than we do theirs. So there are trillions in US based assets paying out returns/profits to foreigners, making them wealthier, versus in the past the US brought in tons of money from our assets abroad, making us wealthier.

          Who owns the assets matters! It’s kind of the central plank of capitalism…

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  6. Obviously China has a competitive advantage in building things and its economically optimal to buy everything from them while we focus on services.

    But what happens to the 10s of millions of Americans who are able to do manufacturing jobs but too dumb/whatever to make it in the service industry? I guess they are out of luck

    1. “But what happens to the 10s of millions of Americans who are able to do manufacturing jobs but too dumb/whatever to make it in the service industry? I guess they are out of luck.”

      Neo-Malthusians continue to be not real bright:
      “Recent Releases. US Unemployment Rate Falls to 18-Year Low. The US unemployment rate fell to 3.8 percent in May 2018 from 3.9 percent in the previous month, and below market expectations of 3.9 percent.”

      1. Same reason we used for Obama, RECORD LOW labor force participation
        Trump has made NO CHANGE in the Americans who have GIVEN UP on finding a job.
        Check the PROOF. Then scream, “Fuck off”
        (smirk)

        1. Fuck off and die, Hihn.:
          “United States Labor Force Participation Rate”
          https://tradingeconomics.com
          /united-states/labor-force-participation-rate

          1. (boldlface in defense of repeated assaults, by a PROVEN AGAIN fool)

            My linkl is the official BLS data, for both Trump and Obama.
            Your data is as fucking useless you are; NO COMPARISON WITH OBAMA!

            So, I’ve kicked your pathetic ass AGAIN!

            This is why Sevo sticks with “Fuck off.” ANY content and he ALWAYS makes an ass of himself.
            LIKE HERE! (smirk)

            1. Bold face in admission you’re a fucking idiot.
              The link I provided shows the participation up and the unemployment down, you fucking ignoramus.
              Fuck off, Hihn.

          2. The range in the link you provided just has a range of 62.7 to 63.1 for the labor force participation rate. Pretty flat if you consider a margin of error plus it’s only for the year 2018.

      2. 2 things Sevo:

        Labor force participation rate. We have more than 10 million fewer people working than we should compared to pre recession by that metric.

        Quality of jobs. Over the last couple decades we’ve essentially had 10s of millions of people trade decent middle income jobs, for shit jobs. $20 jobs for $9 jobs. So yeah, they’re employed, but they’re not better off. Even after cheaper bobbles are factored in they’re in the red.

        This hasn’t hit everybody equally of course, which is why so many people are stoked. Also why lots of other people are pissed.

        It’s the same thing as illegal immigration. If you didn’t have YOUR wages go flat for the last 20 years because of competition from illegals, you’re more or less doing better. But if you DID you’re doing worse. That’s real world shit, I know an old painter guy who said his wages basically haven’t changed since the 90s.

        On net it’s hard to say if we’re better or worse off from this level of one sided trade, but the one thing that is for sure is that many have been greatly harmed with no real way out of their situation (not everybody can become a programmer), and many others have benefited.

    2. “But what happens to the 10s of millions of Americans who are able to do manufacturing jobs but too dumb/whatever to make it in the service industry? I guess they are out of luck.”

      100 years ago…

      But what happens to the 10s of millions of Americans who are able to do farming jobs but too dumb/whatever to make it in manufacturing? I guess they are out of luck.

      1. Just what I was going to say.

        Creative destruction.

        Comparative advantage.

        Yes, let’s all go back to life before ATMs, full service gas stations, elevator operators, and plugboard telephone exchanges.

      2. Nice straw man

        1. The Luddite mentality. And contradiction.

        2. Magnitogorsk|1.15.19 @ 12:52PM|#
          “Nice straw man”
          No straw man at all; an illustration of your lack of intelligence.
          Grow up.

          1. ANOTHER Luddite!

            For all other ignorant goobers, Luddites, in the early Industrial Revolution (1811), suffered Trump-level hysteria.
            Theirs was the fear that automation would cause EVERYONE to be unemployed. Yes, THAT stupid.
            They rioted, and destroyed machinery, especially in cotton and woolen mills.
            Instead, automation allowed people to PRODUCE more stuff … thus OWN more stuff.
            Like 99% of what EVERYONE owns, combined. DUH

            Luddites

            THAT is the ignorant contradiction by the Alphabet Joker …. who also cited creative destruction and comparative advantage, laughably ….. further fucked up by Sevo. Bellowing blowhards.

            1. Who are you even arguing with? If you have a substantive point of disagreement with Sevo here, it’s not even remotely clear what that might be.

              1. marshaul|1.15.19 @ 5:53PM|#
                “Who are you even arguing with? If you have a substantive point of disagreement with Sevo here, it’s not even remotely clear what that might be.”

                Pretty sure you just pegged Hihn.

      3. The problem is that was a different situation.

        Farming versus factory work, neither required geniuses.

        The problem is much of the NEW work DOES require people to be above average intelligence to actually even be capable of doing the job.

        Most people are not mentally capable of being a programmer or an engineer. Therefore you CANNOT have an economy where everybody does those types of jobs. It is literally not possible.

        This ultra egalitarian nonsense idea that everybody is capable of everything is a MASSIVE blind spot in the way we’re running our economy. People are born with a certain level of intelligence, anybody who denies this has either never looked at the evidence, or is a liar. So this is finally the last great frontier as we lose jobs overseas and/or automate things. What will we do with the 80 IQ people when they are literally unemployable?

        There are only so many options. Even most service industry jobs can be eliminated. So unless we bring back every middle class home having 2-3 servants, I do wonder how it will all turn out. If that’s the way it goes, I expect a hell of a lot of social unrest…

        1. Even the army won’t take people with

          1. less than 80IQ. What makes you think a manufacturer would?

            1. Ugh.

              The reality is, we have a lot of people with 90 IQs doing jobs that people with 80-85 IQs could do… But the economy is so weak, they’ve pushed them even further down the totem pole.

              We have basically almost endless jobs for people with above average IQs, provided they learn a useful trade/get a useful degree. But we have a total lack of ways to put below average people to their proper use.

              The very fact that we have adults working in jobs like fast food should tell you how awful things really are. But I’m not going to try to explain anything to you, because you clearly don’t understand shit, and don’t want to.

              It’s not black and white, you can’t reduce it down to simpleton arguments like you want to make.

  7. Trade deficits are an accounting invention bearing no relation to reality. Trade deficits between countries are no more meaningful than the trade deficit I have with grocery stores, or that my employer has with me.

    1. Exactly. This debate about whether trade deficits are good or bad is pointless. And it all stems from using the pejorative term “deficit” to describe buying more from a country than they buy from us. But if the other country is sending us more goods then we send them, why don’t we call it a surplus?

      1. But if the other country is sending us more goods then we send them, why don’t we call it a surplus?

        You’ve got it backwards. When we pay more for the stuff coming into the country than we get back for the stuff going out, it’s a deficit. When we pay less for the stuff coming in than we get back shipping out, it’s a trade surplus. The notion being that a nation could deplete it’s resources and/or trade currency/credit with frivolous spending.

        1. You’ve got it backwards.

          Maybe more appropriately, “You’ve got it sideways.” “Sending us more goods” is arbitrary. If we ship out a ton of gold and they ship in 2 tons of feathers, they “sent us more goods” but a ton of gold has much more value than 2 tons of feathers. Otherwise, yeah, we’re in a trade deficit with China which means they’re in a trade surplus with us.

          1. “Maybe more appropriately, “You’ve got it sideways.” “Sending us more goods” is arbitrary. If we ship out a ton of gold and they ship in 2 tons of feathers, they “sent us more goods” but a ton of gold has much more value than 2 tons of feathers.”

            Another one that failed econ 101. Who tf would buy 2 tons of feathers with 2 tons of gold? I don’t know which logically fallacy this is…..but it’s really stupid.

            1. Another one that failed econ 101. Who tf would buy 2 tons of feathers with 2 tons of gold? I don’t know which logically fallacy this is…..but it’s really stupid.

              It was *1* ton of gold and *2* tons of feathers and that’s the least embarrassing part of your mental defecation.

              1. OK, who would buy 2 tons of feathers with 1 ton of gold?

                The problem isn’t the precise valuation, it’s that you seem to believe that there is such a thing as objective value. There is not, and free trade is, axiomatically, an equitable exchange.

                1. OK, who would buy 2 tons of feathers with 1 ton of gold?

                  The problem isn’t the precise valuation, it’s that you seem to believe that there is such a thing as objective value. There is not, and free trade is, axiomatically, an equitable exchange.

                  If there’s no objective value then a ton of gold could quite reasonably equal the value of 2 tons of feathers. The fact that you’re asking the question means you don’t believe the shit you’re shoveling.

                  Moreover, the issue isn’t with any given surplus or deficit and never has been. The issue is with long running deficits whereby 2 tons of feathers is imported and an IOU is exported.

                  1. There is not, and free trade is, axiomatically, an equitable exchange.

                    Free trade between free citizens or free trade managed between a federal republic and a communist dictatorship? Because one sounds like the axiomatic free trade you describe and the other one sounds like a bill of goods.

                    1. mad.casual|1.15.19 @ 7:06PM|#
                      “Free trade between free citizens or free trade managed between a federal republic and a communist dictatorship?”
                      Care to tell us what the US gov’t buys from the Chi Coms?
                      I’m betting you can’t, so you point is what you’ve invented to support your unsupportable claim.

                    2. Care to tell us what the US gov’t buys from the Chi Coms?

                      So as long as a private citizen or corporate entity is involved, whether they choose to be or not, whether their choice was an act of cronyism or not, whether their role was central or simply to tie a bow on top, the trade and market has been blessed with freedom? I mean, sure, Chinese-made chips nested on Supermicro motherboards turned up across the DOD and CIA (and, presumably, the NSA and elsewhere) in everything from mail servers to battleships and globalization is a fucking thing but let’s play dumb like the US Government doesn’t buy shit and certainly doesn’t buy shit from China.

                      “Fuck you. Cut spending.” actually means “Fuck you. Cut spending, unless you loop in a ‘private contractor’ or two?” I mean fuck, might as well just conclude that socialism is really fucking popular as long as the costs are low, that people generally don’t give a shit otherwise, hang your hat on Western Civilization, and call it a fucking day. China spies harder on its citizens than our government does on us and strives to spy on us just as prolifically. So, who gives a shit if the US Gov’t is tapping our phones through quasi-legal FISA warrants if the Chinese can get it illegally for their own purposes and if we don’t care if one or the other is doing it why care at all?

                  2. If there’s no objective value then a ton of gold could quite reasonably equal the value of 2 tons of feathers.

                    First of all, there is no objective value. Not only do I believe this, it’s fairly easy to demonstrate rhetorically and virtually impossible to rebut effectively.

                    One ton of gold “could quite reasonably equal the value of two tons of feathers”, simply because all it would take is a person with 1 ton of gold, and another person with 2 tons of feathers, who agree that the value is equal. I rather suspect you’ll have difficulty finding a buyer at that price for your 2 tons of feathers, however.

                    Secondly, 2 tons of feather in exchange for an IOU seems like an excellent deal to me. In fact, though I value feathers little, I would take this deal, as if I profit I can easily meet the IOU, and if I don’t I can tell you fuck right off.

        2. Someone’s concerned that citizens might spend frivolously? But only when they spend on foreign goods? If this is such a potential problem why don’t we freak out when GDP soars? People might be spending frivolously!

          1. You really are one confused dude.

            Someone’s concerned that citizens might spend frivolously?

            I never made the distinction between government and private spending, I was merely commenting as to what constitutes a surplus and that we do, in fact, call it that when we have one.

            If this is such a potential problem why don’t we freak out when GDP soars?

            Production =/= spending.

            People might be spending frivolously!

            The concern isn’t exactly that citizens might spend frivolously, as much as a nation, government *and* citizens might do so and, as I indicated earlier, I’m not recommending any policy prescriptions. We can both agree that a diabetic spending his entire paycheck on candy isn’t sustainable, or just a bad idea, without forcing the diabetic to change his behavior one way or the other. Similarly, a nation rife with software engineers doesn’t need to run up a trade deficit to get software made locally or is likely having some considerable economic (or educational) trouble if it does.

            1. You should just quit while your behind at this point….

        3. The U.S. buys $10,000 worth of goods from China. China buys $10,000 worth of goods from the E.U. The E.U. buys $10,000 worth of goods from the U.S. So, we technically have a $10,000 trade deficit with China. Is there really any deficit here, though? Why so focused on a trade deficit with a single country? It’s not like the U.S. and China are the only countries in the world or that we only trade with each other.

          1. “The U.S. buys $10,000 worth of goods from China. China buys $10,000 worth of goods from the E.U. The E.U. buys $10,000 worth of goods from the U.S. So, we technically have a $10,000 trade deficit with China. Is there really any deficit here, though? Why so focused on a trade deficit with a single country? It’s not like the U.S. and China are the only countries in the world or that we only trade with each other.”

            mad.casual is confused; you aren’t.

          2. Why so focused on a trade deficit with a single country?

            Why sanctions on Russia? Venezuela? Cuba? Iran?

            It’s the same “open borders” bullshit. You can have a welfare state or open borders, but you can’t have both. You can’t take tax money to buy warships and cloud servers for your intelligence agencies, discover they’re impregnated with Chinese microchips and then tell me we can’t avoid trade with China.

            Your tax dollars are already taken, why deny them to someone who would only take more or has specifically avowed to harm you with the dollars you’ve already “given” them?

            Taxation with representation sucks but China has lower taxes and less representation so why not just give up the representation too, right? You wouldn’t hand a gun to someone who’s about to shoot you and you wouldn’t hand enough money to buy a gun to someone who’s sworn to do the same but $1/mo. to someone who openly opposes your way of life and who sticks you with a toothpick on a daily basis? Sure. I mean, free toothpicks, right?

            Why not massively overpay your taxes to the US Government every year? It’s not like they’re going to spend that money on trade with China and, even if they do, the accumulation of the profits of that spending will inevitably trickle down to you and, besides, you get the money back at the end of the tax year anyway.

    2. Trade deficits are an accounting invention bearing no relation to reality. Trade deficits between countries are no more meaningful than the trade deficit I have with grocery stores, or that my employer has with me.

      C+

      This assumes free/fair trade and/or anti-trust is ingrained in all cultures or the law of the land. Otherwise, the trade deficit you run with your employer/grocery store can be problematic.

      1. How is non-coerced trade with a company store problematic? If both parties freely agree with the trade than both parties benefit. The conditions which allow a company store to exist might be problematic, but the trade itself isn’t.

        1. How is non-coerced trade with a company store problematic?

          Jesus Christ are you dense! The problem is that once your employer owns the grocery store, or all the grocery stores, or converts your pay to vouchers to their grocery store, the question of whether your purchasing habits are non-coerced is considerable.

          When you’re trading your grain to a commodity broker owned by the Chinese government who also controls a bank that holds considerable amount of US debt, as well as lots of the domestic grain production in China, it becomes a considerable question about whether you’re trading on a free and fair market. Clearly, not as bad as if they’d controlled the US and EU markets as well, but still, not exactly self-interested unfettered free trade.

          1. Not very good with nuance, are you? No one threatens a worker with force if he doesn’t buy from a company store. What led to the situation is irrelevant to whether the trade is beneficial to both parties.

          2. Voluntary trade *is* fair trade. How dense do you have to be to not understand that?

            Dollars out HAVE TO equal dollars in. There is no such thing as a trade deficit (or surplus) except when cooking the books, which is how the “deficit” is defined.

            Trade deficits between any two arbitrary countries in a world of more than two countries is also cooking the books to get the scare you want. It is meaningless otherwise.

            You ought to try Econ 001 before you try faking Econ 101.

            1. Dollars out HAVE TO equal dollars in. There is no such thing as a trade deficit (or surplus) except when cooking the books, which is how the “deficit” is defined.

              You ought to try Econ 001 before you try faking Econ 101.

              Good God. Between you and Fairbanks, I hope at least one of these posts is satire. The two economies involved don’t have fixed money supplies and governments aren’t normally in the habit of generating them out of choice. So, dollars out =/= dollars in explicitly. And my answer of “What is a trade deficit/surplus?” is the Econ 101 definition. As opposed to Fairbanks’ apparent obliviousness as to what a trade surplus even is. Whether you think the deficit means anything or not doesn’t change the fact that, on paper, we have a trade deficit. Again, the fact that I’ve presented the definitions without saying trade deficits are bad, which they aren’t, or that we should do anything one way or the other to resolve any given deficit convinces me that you people are loony.

              Like saying I don’t believe in UFOs when I point out that identified flying objects do exist, we just tend to call them by whatever they’ve been identified as. Fucking kooks!

            2. You are not considering the Capital Surplus which is the reciprocal of the Trade Deficit. If they don’t buy from us what else can they do with their dollars but invest them here?

              1. If they don’t buy from us what else can they do with their dollars but invest them here?

                Imprison journalists and their families? Finance hostile regimes? Silence Western dissent? Fill the pockets of rulers and dictators-for-life? All of the above and then some?

                1. The only thing to do with greenbacks is buy American goods. Of course the Chinese and everyone else can postpone that reckoning if they find someone willing to accept greenbacks, but all that does is mean that someone else has to buy American products.

                  Dollars out MUST equal dollars in. Your idiotic comments about prison has nothing to do with dollars. Your idiotic comments about financing hostile regimes is just another instance of someone expecting to buy American goods. Your idiotic comment about filling pockets implies you think collecting dollars itself is useful, as if they have some intrinsic value.

                  Your idiotic comments do not address anything to do with dollars out MUST equal dollars in.

                  1. “Your idiotic comments do not address anything to do with dollars out MUST equal dollars in.”

                    Mad.casual is *convinced* that someone is taking his money, since at the end of the month, there isn’t as much in the cookie jar as there should be!
                    So it’s those damn Chinks!

                  2. Your idiotic comments do not address anything to do with dollars out MUST equal dollars in.

                    A) Dollars out explicitly do not have to equal dollars in. The Fed can always print more money and the ceiling can always be raised.

                    B) Dollars out equaling dollars in doesn’t say anything with regard to who’s pocket the dollars end up in.

                    C) Again, you’re ignoring my point. I have $500 which I can hand to you or I can use to buy a gun with which to shoot you. It’s the same $500 either way, so you don’t really have a preference as to how it’s spent, right?

                    D) See C, except I only have $400, $50 I take from you in taxes, and the arms manufacturer across the pond is willing to cut me a deal if I buy two guns for $450 because he doesn’t like you.

                2. mad.casual|1.15.19 @ 7:01PM|#
                  “Imprison journalists and their families? Finance hostile regimes? Silence Western dissent? Fill the pockets of rulers and dictators-for-life? All of the above and then some?”

                  You left out getting Trump elected and also your fave source for tin-foil hats.
                  Pathetic.

                  1. You left out getting Trump elected and also your fave source for tin-foil hats.

                    WTHF? That China imprisons journalists and their families isn’t in question. That they finance or support regimes hostile to US and US allies isn’t in question. That they spend money silencing dissent with China in the West isn’t in question. That their government is run by a dictator-for-life isn’t in question.

                    None of this is tin-foil hat. I’m wasn’t in favor of Trump and I don’t/didn’t buy into foreign powers influencing his election. That’s not the same thing as the Chinese embassy in England insisting Durham University uninvite a speaker because they might hold or voice an unfriendly opinion about China.

    3. This 100% except not the way you think.

      In macro-level trade flows, there isn’t even an attempt to distinguish between actual arm’s-length transaction trade and internal accounting within a multinational. Or any attempt to distinguish (in the case mostly of India) whether imports of gold are commodity imports or merely a currency exchange. Or whether the ‘investment surplus’ is an actual investment surplus or a reserve currency transaction.

      Not to mention of course that anyone who yaps about ‘comparative advantage’ when it comes to China-US is speaking out of their butt because re those two countries what is happening is ABSOLUTE advantage not comparative advantage.

      1. “Not to mention of course that anyone who yaps about ‘comparative advantage’ when it comes to China-US is speaking out of their butt because re those two countries what is happening is ABSOLUTE advantage not comparative advantage.”

        Lefty assertions are neither fact nor argument; they tend to show the lefty to be an ignoramus.

        1. OTOH – every post of yours evinces proof that you can lead a dog to the Internet but you still can’t stop them from drinking out of the toilet.

          1. JFree|1.15.19 @ 1:07PM|#
            “OTOH – every post of yours evinces proof that you can lead a dog to the Internet but you still can’t stop them from drinking out of the toilet.”

            So once again, absolutely nothing to support your claim, other than a brain-damaged attempt at an insult.
            Not surprising at all; tell us again how some company forced you to buy their product. Laughing at lefty ignoramuses is always a pleasure.

    4. The only reason people can hold this fallacious idea in their heads is because we don’t have a real currency anymore.

      Back when we had real currencies, it was very easy to conceptualize the fact that your nation was literally running out of gold and silver!

      The fact that we print endless fake money obscures the fact that we’re in fact less well off every year we run in the hole in terms of wealth. Nobody needs to eschew all comforts in life, but living beyond your means (what you produce) forever is not a good long term plan for a person, or a nation.

  8. Yup, even with tariffs China is trading with the USA like crazy and refusing to allow much in the way of Americans goods.

    Poor Boehm was wrong…again.

    The Trump administration’s protectionist trade policies were supposed to reduce America’s trade deficit with China?or, at least, that’s what President Donald Trump has repeatedly claimed

    Cite it you hack.

    1. Speaking of hacks ….

      ==== hypocrisy ====
      loveconstitution1789|12.3.18 @ 10:20AM|#

      Do you need me to link the rules of NAFTA and USCMA so you can compare and contrast the “worseness” for us?

      Yes, please, Mr Hack 1789, please cite yourself.

    2. Poor alphabet troll.

      Script broken.

      1. Fuck off, statist!

      2. Poor trolls. Jumping between socks all day.

        1. Seriously though, fuck off already. The commentariat took a major nose-dive the day you started posting.

  9. “That probably has little to do with Trump or his trade policies, of course. The fact that American consumers and businesses are buying more things from China likely has more to do with the strength of the American economy over the past several years and increasing industrial capacity in China”

    I think you may be missing a big chunk of the picture here.

    The big story over the last few weeks is that China’s domestic consumption is weak. Things like iPhone sales underperforming making Apple and others guide earnings lower than expected has been the dominant story. As China’s domestic demand slows, their appetite for imported good suffers. Increasing industrial capacity isn’t the issue. It’s a decrease in China’s domestic demand. American consumption was quite healthy through the holidays. China’s domestic demand continues to show weakness.

    http://www.reuters.com/article…..SKCN1P50UH

    1. +1000

      You’re asking Boehm to report the story with as many facts as he can get to paint a clear objective picture.

      1. If I were trying to hype Trump, I might point out that domestic demand here in the U.S. probably isn’t completely unrelated to Trump’s deregulation and tax cuts.

        I’m not here to hype Trump. I’ll hype deregulation and tax cuts, though, all day long. When it comes to deregulation and tax cuts, believe the hype!

        1. Yup. Our economy is rocking it!

          If government stays out of it, any future minor market correction will likely be like the ups and downs of the stock market- nothing but the market doing what it does and nothing very harmful.

          1. Yet you still advocate punitive taxes on American consumers who choose to trade with whomever they wish regardless of boarders.

            1. boarders

              As long as they aren’t tearing up staircases grinding down them, I don’t care who they rent to.

    2. “American consumption was quite healthy through the holidays. China’s domestic demand continues to show weakness.”

      We should export Christmas…

      1. People also spend more money at year end because that is typically the 4th Quarter business cycle and end of year for Health Savings Accounts that expire.

        1. Also, Flu Shots.

        2. HSA’s don’t expire. Flex Spending Accounts do, but it’s been over fifteen years since the better option of an HSA became available.

  10. From Cafe Hayak:

    The trade deficit is measured by the difference between imports and exports, so a decline in exports will increase the trade deficit if imports remain constant. Yet exports may decline because an expanding internal economy has siphoned domestically produced goods away from world markets. American producers are selling to other Americans rather than to foreigners. So a trade deficit can be caused by an expanding domestic economy ? which is a sign of economic health rather than sickness.

    DBx: Yep. And as regular readers of this blog know, there are many other reasons why trade deficits ? or, more generally, current-account deficits ? are not necessarily symptoms of economic weakness at home. The very opposite is very often the case. Nor are such “deficits” ever symptoms of “unfair” trade practices abroad. Nor are such “deficits” sources of future economic woes.

    The main function served by trade deficits is to allow protectionists to spook the general public into a willingness to be preyed upon by politically powerful domestic producers.

    1. The problem is fiat currency. If we didn’t have fiat currency, trade deficits would always solve themsleves. No country could ever run them forever because they would eventually run out of currency causing the economy to contract and the deficit to go away. This is the natural order of things. Fiat currency disrupts that by allowing nations to basically print money to finance their trade deficits. For a nation like the US, it seems to work and work maybe forever. But, it is still printing and borrowing money and I find it hard to believe that it all won’t come do at some point.

      1. “The problem is fiat currency. If we didn’t have fiat currency, trade deficits would always solve themsleves. ”

        They would solve themselves in the same way people starve to death during depressions, which I think is your point?

        1. They would solve themselves in the same way people starve to death during depressions, which I think is your point?

          Would you feel better if they starved to death in bread lines with wheelbarrows full of rubles?

        2. What?

          Your comment makes no sense. Having fake money printed on a whim is a bullshit system. When we had a system that restrained the government from manipulating things, we had to function responsibly on many levels. Import/exports had to be balanced sooner or later, or you ran out of cash. Government spending and debt too had to be balanced. So on.

          Fiat money isn’t worth the paper it’s printed on, and creates perhaps the worst distortions out of ANYTHING in the economy.

          1. “Fiat money isn’t worth the paper it’s printed on, and creates perhaps the worst distortions out of ANYTHING in the economy.”

            In that case, I’ll be happy to take all of yours. Let me know when you’re ready to give away all of your “fake” money.

            1. Well, it’s already lost about 98% of the value it had when the Fed came into existence dildo.

              And IMO it’s only a matter of time before it loses a hell of a lot more, what with going on 22 trillion in debt, over 100 trillion in unfunded liabilities IIRC. People will still take it for now, but I prefer to have my “money” in assets that have intrinsic value. Like the business I own. Or real estate. Or even a bit of gold and silver.

              You’re just a moron troll, I don’t even know why I’m bothering to respond. If you’re so fucking stupid you don’t understand how big a scam, and guaranteed shit show someday, that fiat money is… Well, go read some more Ron Paul books/articles!

      2. This is the natural order of things. Fiat currency disrupts that by allowing nations to basically print money to finance their trade deficits. For a nation like the US, it seems to work and work maybe forever. But, it is still printing and borrowing money and I find it hard to believe that it all won’t come do at some point.

        There’s a bit of an error here. It’s always coming due in various forms such as inflation, purchasing power, wage stagnation, etc. The question isn’t whether it will come due, the bill always comes due, the question is whether it will be catastrophic or not.

        1. Yup. If I became pres in 2032 or whatever, I’d probably shoot for a decade of 5-8% inflation a year. Hopefully not enough to completely bork things… But enough to inflate our way out of a lot of our debt. It’s really just fucking all our creditors, but they should have been smart enough to not trust us. Idiots who buy government debt deserve whatever they have coming!

          Either something like that, or something more catastrophic is inevitable.

          1. I’m not speaking about you (or John) in particular, but this exchange on the forum has caused me to lose considerable respect for several members who, though I didn’t always agree with them, I presumed at least had their heads screwed on straight.

            Like discussing with a friend, acquaintance, or co-worker about how much, if any, you should tip and them acting like you’re weird because you don’t routinely dine and ditch.

            1. I get what ya mean.

              A lot of people on here talk a good game on some subjects… And then you find out they’re complete retards about things you would think ANYBODY with even a passing interest in libertarian thinking would know about. I’ve seen a LOT of people on here over the years that are apparently complete brainwashed on fiat currency systems, and basically just believe the magical Fed Fairy makes it all work perfectly somehow, and that there are never repercussions for expanding the money supply, being trillions in debt, etc.

              As you said, the bill ALWAYS comes due one way or another.

          2. If you look at the money supply, we run around 9% monetary inflation every year already.

    2. The young Soviet state literally starved millions to death so they could steal their grain, sell it abroad, get gold, and buy foreign help/goods with it. Millions dead so they could have a trade surplus so they could invest in the Soviet state.

      I cannot fathom how mind blowingly ridiculous it is to pretend trade surpluses are some accident or that they are not beneficial. Germany, Japan, Taiwan, South Korea, China all tell me that is bullshit. Everyone is free to spout their favorite Adam Smith or von Mises quotes but historical precedent over the past century flies in the face of it: export oriented, surplus generating economies are the ones that are most successful and set the rules for the world.

      1. You forgot to mention that when the USA ran massive trade surpluses, that was ALSO when our wealth and middle class exploded in wealth.

        It’s a simple matter: Produce more than you consume, and invest the difference, and you will become wealthy. Consume more than you produce, and you will become poor. PERIOD.

        The thing to keep in mind is that the US overall IS producing more than we consume, at least on paper. That’s how the economy is still growing. But there’s a lot of theoretical potential wealth we’re losing out on. If 500 billion a year MORE remained in the USA, and employed say 10 million more people at 50K a year, we’d be a wealthier country.

  11. Confucius say: “Man who run puppy mill have yen for flea trade.”

  12. We also have a record Credit Surplus

  13. It just seems odd to focus on trade with a single country. I’d think what would be much more relevant is the net global trade with all countries combined.

    1. Still a deficit.

      In any event, a large trade deficit with a pretty significant political rival and military rival is pretty important, especially when it is in the hundreds of billions. Ohh did I mention they are run by Communist totalitarian trash?

      1. It is not a zero sum game.

        Trumpist protectionists don’t get that.

        Where are the libertarians.

        1. Trade is NOT a zero sum game in nearly all circumstances. When you are enriching your biggest political and military rival, however, it is not illogical to be wary of your economic ties to them and who the trade benefits more.

  14. Can we get some Windex for the President’s crystal-ball?

  15. I am for free trade AND I am concerned about our trade deficit ? not a contradiction. Free trade means more choices for consumers as well as more potential customers for products made in America ? 12 million US jobs are tied to exports. But how can we sustain a condition where America ? or any geographic region ? consumes more than it produces?
    Why are we not as competitive as we could/should be in world markets? Yeah, other countries have unfair trade practices, but I think it’s mostly things we do to ourselves.
    For starters, it’s expensive being the World Policeman. We spend a lot to protect our allies who are also our economic competitors. How much more might a Toyota cost if Japan had to pay its fair share of the cost of defending the free world?
    Of course, we are not protecting China. But we are borrowing a lot of money from China to finance our bloated federal budget, which includes our defense budget, which, in part, helps protect Japan from?China. If we didn’t borrow all that money from the Chinese, they might have to use their surplus trade dollars to buy American products ? either that, or wallpaper the Great Wall with pictures of US presidents.

    1. There’s a lot of common sense in there… Be careful posting stuff like that around Reason, you’ll get flamed for thinking like a sane person!

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  17. It’s all fine and well to trade, but people who pretend trade deficits aren’t indicative of economic issues in the country running in the red are idiots. We’re fundamentally producing less than we’re consuming… And if you do that you’re forced to sell off assets. Not good long haul.

    The fact is that Adam Smith himself carved out most of the exceptions to “all free trade all the time!” that modern conservatives do… Because some of them are just plain common sense. The ones he didn’t mention are mostly because the world has changed since then. Trade deficits naturally correct themselves if you’re using a REAL currency, like gold. When you run out of gold to import, wages naturally fall in the deficit running country, until they either start producing some things domestically and not importing anymore, or they start producing something else they can export to balance things out again. An endless deficit wasn’t really possible in the past.

    Thank god automation is helping with this issue, since nobody seems to have the balls to do what needs to be done to bring REAL free trade about with people who play dirty pool like China.

    1. Another thing, WTF is it with people believing that the “moral” thing to do ALWAYS has to ALSO be the best practical thing?

      You can argue the only moral position is to let people trade with whoever they want, while ALSO conceding there may be some practical downsides. Like that perhaps the overall US employment rate and average income is lower, because we’re not able to fully utilize our less intelligent citizens since we exported the types of jobs they’re capable of doing.

      There’s nothing contradictory in there.

      IRL there is rarely anything that is ALL upsides. Everything has pros and cons.

      I bet a small number more people die in the US because of our gun rights. I think culture, economic factors, etc are far more important, but if you could A/B 2 identical societies in a lab, I bet there would be a very small reduction in deaths with zero guns around. That doesn’t mean I think we should have fewer gun rights though! The moral value trumps the “practical” value to me.

      I’ve said this about open borders too. I don’t think it practically benefits the US, but accept it is the proper libertarian moral position. I think we have a lot of pros, AND a lot of cons from unilateral free trade. I don’t know that we come out ahead after the welfare state is factored in, lower labor force participation rate, etc.

      That all you people MUST believe it is ALSO the practical best outcome, and refuse to even entertain the idea it’s not… It is very shallow thinking.

      1. Good post. Agreed

        1. Thanks! I’m glad there are a few people with common sense on here… Sometimes these ultra dogmatic libertarians are harder to convince of things than even moron liberals or conservatives. A simple thesis like the moral thing isn’t always the best practical thing seems to fly by TONS of people on here when I’ve made that argument before.

          I at least have the balls to admit I’m willing to be an amoral asshole on some issues because I don’t think the practical downsides are worth the virtue signalling. IMO there are ZERO flaws in libertarian moral principles… There are just a few that have downsides that aren’t worth it in the real world IMO.

  18. Excerpt from the novel, “Retribution Fever”:

    A second provision will apply the same restrictions to foreign enterprises establishing and purchasing businesses here that their respective governments impose upon ours there. Denying American businesses the opportunity to conduct commerce there freely while foreign businesses enjoy the privilege to do so here is counter-productive and detrimental to the well-being of the nation. Sending abroad profits made in these United States does not benefit this nation unless there exists a quid pro quo.
    A third provision will penalize other nations for subsidizing their exports to us. Allowing such subsidies may be a benefit to American consumers by lowering prices in the short term but becomes a liability to employees, employers, and the nation by destroying companies and their jobs in the long term.
    This nation will apply the same restrictions to imports from any other country that that country applies to our exports to it whether direct such as tariffs on our imports or indirect such as relief from a domestic so-called Value Added Tax (VAT) on their exports. Levying low or no tariffs on imports from other countries that impose punitive regulations on our exports is indefensible; causing a justifiable outcry from our domestic producers, especially from Small Business. As with foreign subsidies, our levying low tariffs might benefit American consumers short-term but at the cost of losing their jobs long-term.

  19. The thing that USA is good at producing and has a perfect monopoly is those green dollar bills that cost nothing to produce. If we can give those $$$ to Chinese and get some useful stuff from them, it is win for the land of the free. If you insist that you should give Chinese “stuff” instead of cheap dollar bills I think you are stupid.

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