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Your farm has a trade deficit
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JonSCKs
Posted 4/25/2025 08:48 (#11201856 - in reply to #11201811)
Subject: At some point you are correct.. however..


Kooiker - 4/25/2025 08:28

SMH, the stupidity of this comparison drives me nuts.


A trade deficit with one supplier or one country isn't a problem.    Its the aggregate trade deficit that's the problem.     If you run an aggregate trade deficit (spend more than you take in) as a farmer, eventually you will go broke.     

The only reason the USA hasn't went broke running a $900 billion/year (aggregate) trade deficit is that the govt can create more money out of thin air.     Which just devalues (inflation) existing $'s.



At a huge deficit you are correct however since trade benefits both sides.. else why would a trade happen?  The economic increase occurring in the US freeing capital to go do something more productive vs making T Shirts like Vietnam or Flat Screens like China.. The US can pursue with more capital by buying.. trading.. for items for less.. than we can procure on our own.. which enriches.. everyone.

The US economy grows.
Vietnams economy grows.. and they buy more US goods.. agricultural.. which further grows the US economy.. etc.
China.. mostly ditto.. cept they spend some on their military and BRICS pursuits in order to flip the tables some day.

but no doubt how a “rising tide” from trade.. literally “lifts all boats” in economic growth.

This is Econ 101. 

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