Stable Genius Once Again Picking Winners and Losers

Where are you getting these definitions? A consumer economy is one where a major portion of the GDP is derived from consumer spending. We are, and have been, a consumer economy. Whether or not we run a trade deficit has nothing to do with it.

 

No, sorry. You said the definition of a consumer economy was on that consumes more than it manufactures. That's incorrect.
Then you said we are a consumer economy because we run a trade deficit. That is also incorrect.

According to economic theory trade deficits are supposed to be detrimental to a nation's economy. However, the US is the world's largest economy and it's currency is a world standard. As such, trade deficits don't really harm us too much.

 

What? The US debt has little to do with the trade deficit. The US is in debt because they spend more money than they take in. They finance their debt by selling T-Bills (and T-notes, and T-bonds.) You will need to explain the linkage between US businesses importing more goods than they export and the US continually running a budget deficit and running up the national debt. What is the relationship between US debt and the trade deficit?

Nope. China is content with buying US Treasuries because they need a safe place to park all the profits they are getting from selling cheap stuff to US consumers. Also if US Treasuries are low priced (meaning they don't pay higher interest than other countries bonds) that's an indication they are safer. Buying up US bonds fortifies the fact that the dollar is a strong currency. If the dollar is a strong currency it is worth more than China's currency, meaning China's products are cheaper for US consumers to buy with US dollars.

Keep repeating it all day and all day tomorrow--won't make it true. A consumer nation is one where the consumer's purchases drives the majority of GDP. (You say "consumer economy" as if it is a bad thing. You have yet to show that it is so.) Running a trade surplus does not mean a country isn't a consumer economy.

Google "countries with a trade surplus" and tell me if they have a fabulous economy. Or if you'd want to live there.

I can't think of many first world countries that are NOT a consumer economy...

Saudi Arabia is not a consumer economy, it is a producer country. They produce crude oil. It drives their economy. I suppose China is not a consumer country. They don't have a large enough middle and upper class to make per capita purchases a majority of their economic activity. I suppose China is still considered an agricultural economy. Not for long though.







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I don't know why you would be offended by the title. Trump has referred to himself as a "stable genius".

As far as the market rising, I'm very happy it has risen under Trump's policies of tax cutting, regulation cutting, and generally a pro-business stance. However, a tariff on steel and aluminum is going to be seen by the stock market as a bad move and the decline of the markets confirms it.

 

Please explain the mechanics of how this works. A foreign country buying US debt does not counteract the trade deficit.

First explain where is the trade deficit in this formula and then I will take a shot at attempting an explanation.

 

The trade deficit is a minor player in the United States GDP formula.

You're evading my question. What is the link between government debt and the trade deficit?

 

So are you saying if we did not have a trade deficit with China we would not be selling them Treasuries?

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How much steel does the US use per year?
How much is imported per year?
How much of our steel is imported from China?





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