Why is a trade deficit inherently bad? We are the richest nation on the planet. By sharing our wealth through buying goods and services, we are helping other, productive people to increase their standard of living. I’d much rather get along with the neighbors that way. The best way to entice our neighbors to enjoy the capitalist life is to give them the opportunity to directly enjoy the fruits of their labors. They can do it, and we can help. Does that make the USA the Home Depot of capitalism? ;^)
BTW, just how communist is mainland China these days?
“BTW, just how communist is mainland China these days?”
Probably about as communist as the state of MA; but they do have significant human rights, banking, and intellectual property issues that need to be fixed is they really want to fully participate in the world economy.
The problem with a significant trade deficit is that it’s not sustainable. IMHO, the win-win solution is for the U.S. to find very high value added goods and services to sell to the developing world while importing lower-end manufactured goods. The developing world needs both the technology and the jobs, and the developed world cannot compete in the manufacturing sector due to labor cost. If the U.S. wants to maintain it’s standard of living, it is going to have to continue to earn it.
When oil gets to $150/barrel and gas to $5/gallon there will be a self-correcting move to less driving, small cars, and more people taking the bus.
This happened after each oil shock, but this time the gas will not come back dowan, and $7/gallon will be the next plateau.
It’s not just the politicians who are telling fibs. We are all telling them to ourselves. I would drive those large go-cart type ATV’s if they were road-legal. I don’t care what the weather or temperature are, except that I might adjust my schedule on long trips. Make it legal and I would buy one.
With an estimated 62% of the world’s oil shale and being the Saudi Arabia of coal (Google Fischer-Tropsch) reserves that the US has, the country could achieve energy independence but that will not happen in a serious way until the easy oil is gone. C02 emission may need to be dealt with.
We waste relatively cheap fuel driving oversize and mostly empty vehicles but it does not matter. One day, sooner or later, the easy oil will be gone. That day is beyond the comprehension of most people and our representative government reflects that thinking. We simply do not care about the needs of long term future people to live as well as we do; consider that to be their problem, not ours.
Why is a trade deficit inherently bad?
Because it leads to a devaluation of our dollar. For what I think is the first time in history, the Canadian dollar is worth more than the US dollar, and as a global citizen, a strong dollar means we can buy more globally for our money.
The main reason that the trade deficit scares me is that several things are happening in addition to the devaluation of the dollar. Working-class jobs are going overseas while U.S. citizens consume more per capita than any other country. The cheap goods we buy mostly come from overseas. This means that wealth is flowing out of our country. This simply can’t go on for ever. Globalization can be positive if trade is balanced, but the current outflow of wealth is not indefinitely sustainable.
China artificially inflates the value of its currency. In a global economy that negatively impacts its trading partners, adding to the lack of equilibrium.
Speaking of CO2, I heard a discussion about it on the radio today. It seems that if we salt the ocean with iron in the right locations, phytoplankton will grow. The number of CO2 molecules that the phytoplankton consume is several orders of magnitude larger than the number of iron molecules needed to feed the plankton. There is a concern about creating large amounts of a species that do not exist in the open ocean, but it is easy to control the plankton. Just stop supplying iron and they die.
I think it’s funny that people are looking for THE answer to energy independence. I say, why not implement them all?? Do a little research on alt fuels- ethanol, methanol, biodiesel, electric, hybrids, even propane and natural gas-- and it’s clear that they all have positive and negative aspects. Those positives and negatives can carry different weight depending on exactly what one wants out of their energy.
Want POWER??-- go methanol
Want long distance MPG??-- go hybrid
Want an easy conversion??-- biodiesel or propane
Instead of “regular, plus, supreme” at the pumps, we could just have different options like that, and different vehicles that use different fuels can use their own respective pumps.
That’d take the weight off of any one particular “cure” killing our agriculture or economy. Plus the competition would probably keep prices down some.
That’s my idea for what it’s worth… (probably not much).
Your idea hits the nail on the head! We will need all these sources of energy, as well as new and better thechnology. The gas station of the future may have gasoline (several grades),diesel, biodiesel, electricity, hydrogen, ethanol, etc. Even BP and Shell who are doing the omst to diversify fuel supplies, are telling us that.
Yes, there are viable national interests in being able to independently produce a good, but experience has show there are painful unintended consequences.
From post-WWII until around the end of Vietnam, the US Gov’t thought it advisable to be able to independently produce (among other things) steel. New factories were built, none of the old ones modernized (because steel co.s were happy to take the profits and run), unions took thier cut of the profits in high wages and benefits (because that’s what unions are designed to do). Then the market ultimately corrected, as someone who spent their formative years in '80s Pittsburgh can attest.
Oddly, the US gov’t is happy to let industrial workers bear the full brunt of market corrections, but usually shelters farmers from the same. Go figure…
" Oddly, the US gov’t is happy to let industrial workers bear the full brunt of market corrections, but usually shelters farmers from the same. Go figure…"
Farmers are everywhere, while industrial plants are not. The steel industry was and is mostly in PA, IL, and IN. They did not have the clout in the House or Senate to get an unlimited pass.