Annual trade deficits are ALWAYS an immediate detriment to their nations’ economy.

Supposn1

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Annual trade deficits are ALWAYS an immediate detriment to their nations’ numbers of jobs and median wage.


[At the end of this post is a transcription of the paragraphs entitled “Trade balances’ affects upon their nation’s GDP” excerpted from Wikipedia’s article entitled “Balance of trade “].


Mitigation of trade deficits’ detriments to their nations’ economies.


Nations’ annual trade deficits are ALWAYS detrimental upon their numbers of jobs and median wage which are reflected within the nations’ GDPs. Those detriments are immediate and their drag upon their nations’ entire economies exceeds the amounts of the trade deficits themselves.


Trade deficits are particularly detrimental to their nations’ families dependent upon salaries and wages; (that includes the overwhelming majority of USA’s middle income earners).



To an extent nations’ lesser than otherwise GDPs due to their trade deficits can be mitigated or even overtaken due to their imported production supporting products. It is also conceivable for a nation’s laborers’ aggregate technical, craftsmanship and production superior accomplishments to similarly mitigate their trade deficit’s detriment to their GDP. Conceivably such mitigation could immediately or eventually match or overtake detriments due to trade deficits.


Unfortunately the USA’s trade deficit is not due to imported production support products and has not demonstrated knowledge, craftsmanship and management skills so superior as to eliminate our trade deficits of goods that have been occurring each year in excess of a half century’s duration.


Respectfully, Supposn

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Transcription of the paragraphs entitled “Trade balances’ affects upon their nation’s GDP” excerpted from Wikipedia’s article entitled “Balance of trade “:

Annual trade surpluses are immediate and direct additions to their nations’ GDPs. To some extent exports’ induce additional increases to the GDPs that are not reflected within the export products’ prices; thus trade surpluses contributions to their GDP are generally understated.

Products’ prices generally reflect their producers’ production supporting expenditures. Producers often benefit from some production supporting goods and services at lesser or no cost to the producers.

For example, governments may deliberately locate or increase the capacity of their infrastructure, or provide other additional considerations to retain or attract producers within their own jurisdictions. The curriculum of a nation's schools and colleges may provide job applicants specifically suited to the producer’s needs, or provide specialized research and development. All nationalfactors of production, including education, contribute to GDP, and unless globally traded products fully reflect those goods and services, these other export supporting contributions are not entirely identified and attributed to their nations’ global trade.

Annual trade deficits are immediate and indirect reducers of their nations’ GDPs.

Trade deficits make no net contribution to their nations’ GDPs but the importing nations indirectly deny themselves of the benefits earned by producing nations; (refer to “Annual trade surpluses are immediate and direct additions to their nations’ GDPs”). Among what’s being denied is familiarity with methods, practices, the manipulation of tools, materials and fabrication processes.

The economic differences between domestic and imported goods occur prior to the goods entry within the final purchasers' nations. After domestic goods have reached their producers shipping dock or imported goods have been unloaded on to the importing nation’s cargo vessel or entry port’s dock, similar goods have similar economic attributes.

Although supporting products not reflected within the prices of specific items are all captured within the producing nation’s GDP, those supporting but not reflected within prices of globally traded goods are not attributed to nations' global trade. Trade surpluses' contributions and trade deficits' detriments to their nation's GDPs are understated. The entire benefits of production are earned by the exporting nations and denied to the importing nation.
 
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dogtowner

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Not sure wiki is the last word on anything. If we can afford a trade deficit we m us be doing something right to be that flush with cash.
 

nytegeek

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Trade deficits don't always or even usually have a direct correlation to GDP. The premise of your argument that they are always detrimental to the GDP is faulty.
 

Supposn1

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NYTeGeek, The expenditure method for calculating a nation’s gross domestic product considers the expenditures of four major factors: Government, investment consumer and balance of global trade. Positive trade balances, (i.e. trade surpluses) contribute and negative balances, (i.e. trade deficits) reduce the calculation of GDP.

Although throughout the world, economic and statistical communities more often use the expenditure method for calculating GDP, all of the generally accepted methods do arrive at approximately similar final conclusions for nation’s GDPs.

Certainly balance of trade determine alone doesn’t determine a nation’s economic condition. Certainly trade surpluses contribute and trade deficits drag upon their nation’s economy.

Respectfully, Supposn
 
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Supposn1

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Not sure wiki is the last word on anything. If we can afford a trade deficit we m us be doing something right to be that flush with cash.


Dogtowner, there’s no reason for me to defend Wikipedia and your opinion or the reputation of Wikipedia is not germane to the question as to USA’s chronic annual trade deficits net effect upon our economy.

It is not contended that balances of trade determines their nation’s entire economic condition; it’s contended that trade surpluses ALWAYS positively contribute and trade deficits ALWAYS drag upon their nation’s economic condition.

Regarding your stating we must be doing something right if we can afford to gladly tolerate our chronic annual trade deficits: if some can afford to light their cigars with $20 bills, that may not be the best use of their $20 bills or they should reconsider and use $1 bills or they should continue smoking tobacco.

But individuals should do as they choose; the trade policies of our nation affect all of us and those that follow us after we’re gone.

Respectfully, Supposn
 
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