6 ms·
The premise of the formula is flawed. There is nothing inherently unfair about a trade deficit between two countries. There's not necessarily anything nefarious
by aerotwelve 1y ago
The premise of the formula is flawed. There is nothing inherently unfair about a trade deficit between two countries. There's not necessarily anything nefarious going on if the United States doesn't buy the same amount of goods from Botswana as they might purchase from the United States within any particular year.
- rayiner 1y agoBut why should there be a structural, long-term deficit between big diversified economies like the U.S. versus EU?
- Marsymars 1y agoI mean, if me and my neighbour both print currency on our home laser printers and buy goods from each other, am I being taken advantage of when I end up with more goods and he ends up with more paper?
- rayiner 1y agoIf you focus on your “comparative advantage” of printing paper and your friend on his comparative advantage of making stuff, then in the long run he’ll win because your economy is fake and his is real.
- deleted 1y ago[deleted]
- Marsymars 1y agoWhat does he win? More paper? Less glibly - What does a short term tariff on the goods I’m buying from him do that isn’t already baked in to this “long run” scenario you’re envisioning? Say I mark up all the goods I buy from him and the result is that I have to spend more time making goods - why wouldn’t I just do without tariffs, benefit from as many goods as possible, and then start making more goods myself whenever my neighbour stops accepting my paper?
- asimpletune 1y agoIt is simply because the USA consumes more.