Tractors and (upcoming) tariffs?

[WinterDeere]

From 1815 until after WWI Great Britain held the role that the US plays today. They ran massive trade deficits and were able to sustain it for over a century. So it is sustainable.

When you have the world's most productive economy, capital flows to you. Your companies have access to cheaper capital than competitors in other countries, which makes them more productive. It's a virtuous cycle.

Here's an article from Paul Krugman explaining why a trade surplus is a sign of weakness, not strength:

China’s Very Bad, No Good Trillion-Dollar Trade Surplus

It’s a sign of weakness, not strength, but a problem for everyone

paulkrugman.substack.com

I'm not arguing that a trade deficit isn't a sign of strength, I know it is. But I also don't believe in perpetual motion machines, or that once you've "arrived", you can safely abandon the mechansim that got you there.

But I'll admit, I'm just a scientist and engineer, not an economist. Economists have creative math that will never make sense to any scientist or engineer.

 

[Hay Dude]

Yep, and that’s why it’s unrealistic to expect them to buy the same amount of export goods that we import.

Again, it’s China we are really concentrating on here. The rest are small time chicken feed.
And they have 4 times the population we have.

 

[Hay Dude]

From 1815 until after WWI Great Britain held the role that the US plays today. They ran massive trade deficits and were able to sustain it for over a century. So it is sustainable.

But the British empire finally fell.

When you have the world's most productive economy, capital flows to you. Your companies have access to cheaper capital than competitors in other countries, which makes them more productive. It's a virtuous cycle.

Here's an article from Paul Krugman explaining why a trade surplus is a sign of weakness, not strength:

China’s Very Bad, No Good Trillion-Dollar Trade Surplus

It’s a sign of weakness, not strength, but a problem for everyone

paulkrugman.substack.com

Paul Krugman has been wrong more times than hair follicles have fallen out of your head.

 

[quicksandfarmer]

I'm not arguing that a trade deficit isn't a sign of strength, I know it is. But I also don't believe in perpetual motion machines, or that once you've "arrived", you can safely abandon the mechansim that got you there.

The mechanism that got us here was having the world's leading universities, government support for basic research, an educated workforce, an independent judiciary and well-regulated financial markets.

 

[ruffdog]

You can count on the billionaires to go golfing while they tell the commoners to "hang tough".

 

[jyoutz]

Again, it’s China we are really concentrating on here. The rest are small time chicken feed.
And they have 4 times the population we have.

Well then it ought to focus on China, not the whole world.

 

[jyoutz]

The mechanism that got us here was having the world's leading universities, government support for basic research, an educated workforce, an independent judiciary and well-regulated financial markets.

Absolutely

 

[Hay Dude]

Well then it ought to focus on China, not the whole world.

Wouldn’t it be unfair to tariff the nuts off China and let the rest of the world go?

 

[Hay Dude]

The mechanism that got us here was having the world's leading universities, government support for basic research, an educated workforce, an independent judiciary and well-regulated financial markets.

If you think the judiciary is “independent”, then you must have missed a lot of what happened in the courts last year

 

[WinterDeere]

The mechanism that got us here was having the world's leading universities, government support for basic research, an educated workforce, an independent judiciary and well-regulated financial markets.

I hope you don't really believe that, as you're substituting only the last few decades of our history for nearly two centuries of industrial revolution that put us there. We were NOT leading the world in universities or research until well after WW2, and really only as a result of WW2. The only thing that made that even possible was our manufacturing capability.

You could go so far as to say our contribution to WW2 was not so much in the fighting of it, as in supplying the allied forces with steel, ships, tanks, and other manufactured goods. American manufacturing is what won that war of mechanical attrician, the opposition could simply never replace lost planes, tanks, and ships as quickly as the USA.

And when the war ended, and Europe and Asia spent most of the next two decades simply recovering, we were already plowing along in the fast lane. THAT is what allowed America to finally surpass legacy world powers in building the world's leading universities and research.