Trump thinks a trade deficit means the US lost. This is false. Americans agreeing to buy goods from another country is a win for both sides.
Trade enlarges the pie, creating more total goods than we’d have without it. Consumers count too, and they benefit by buying foreign products, so do companies using foreign inputs to create goods and services in America.
The US needs to maintain its ability to produce military necessities, but the administration’s approach is to treat deficits generally as a lost. They broadly attack bilateral deficits without a sensible strategy–this hurts most people.
Lower prices aren’t necessarily “cheap”. They mean more. You can buy more; American businesses can produce more.
A lot of manufacturing jobs aren’t even good jobs anymore.
For a long time, a lot of people who really just wanted a smaller government pretended to care about debt (or fooled themselves into thinking they cared about debt).
Three quarters of US government spending make the federal government an insurance company with an army. As a percentage of the total spending, waste fraud and abuse is very small. DOGE was a failure because it didn’t understand the US federal government. If you want to significantly reduce spending, you have to stop sending Americans checks (like Medicare and Social Security), or/and have to weaken the military, although the check cutting part is much bigger than the military spending part.
Republican politicians used to lie, or be misinformed, by saying that tax cuts pay for themselves; now they lie, or are misinformed, by saying Trump won the 2020 election (he did not). It’s hard to make a tough compromise under such politics.
“Mark Cuban is taking aim at the U.S. healthcare system, arguing that widespread billing abuse by insurers and providers could be a major source of federal revenue–if only they were held accountable.
“If we fined insurers and providers $100 every time they over-billed, incorrectly denied care or misrepresented any amount of patient out of pocket, we could pay off the national debt,” the billionaire entrepreneur posted on X last week.”
“From January through September, the most recent month for which U.S. Census Bureau trade data are available, the U.S. imported $1 trillion more in goods than it exported. This is a $118 billion jump compared to the goods trade deficit that the U.S. ran from January to September 2024. (Likewise, the overall trade deficit, which includes services, increased by $113 billion.)
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Recently published data from China’s General Administration of Customs show the Chinese goods trade surplus has increased since Trump took office. From January to September, China exported $875 billion more goods than it imported—a $185 billion jump vs. the same time period in 2024.
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Fortunately for consumers, these macroeconomic statistics are meaningless. You run a trade deficit with your grocery store, I run a trade deficit with McDonald’s, good little boys and girls run a trade deficit with Santa Claus, and we’re all better off for it. As as the economists Daniel Klein and Donald Boudreaux have put it, a trade deficit is equivalent to running a surplus on current stuff.
Likewise, as countries get richer, their labor markets transition from agriculture to industry and then to the service sector. Declining manufacturing employment as a share of overall employment is a sign that Americans are richer, not poorer, than our ancestors.
Trump’s targeted metrics are meaningless as proxies of prosperity. But the fact that his protectionist policies are failing to achieve their stated goals shows just how flawed they—and their justifications—always were.”
America’s rising debt, inequality, and inability to appropriately tax its wealthy, rhymes with what was happening leading up to the French revolution. The French put off their economic problems until the only solution was revolution.
When countries like China focus on heavily investing, initially it works well because they invest in productive things and this grows their economy. However, later, they run out of that many productive things to invest in, in which case they are robbing their citizens of consumption and outcompeting other countries’ manufacturing, but not gaining much actual new productive benefits. This leads to debt.
Bilateral tariffs like Trump is doing don’t work. The U.S. has a huge deficit because it consumes more than it exports. A global tariff could work by making goods more expensive and incentivizing people to consume, now relatively cheaper, domestic products. Bilateral tariffs just mean Americans will import cheap goods from country C and D instead of the heavily tariffed countries A and B.
Getting foreigners to invest in the U.S. hurts the U.S.. The U.S. has plenty of capital to invest and doesn’t need more. Additional investment means driving up the dollar, making U.S. goods less competitive internationally, and hurting U.S. exports.
China has debt to support investment. The U.S. has debt to support consumption. The system is out of whack and needs adjustment.