Comments on: The Budget Deficit, the Current Account Deficit and the Saving Deficit http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/ Insights on Taxes, Economic Policy, Federal Budget | NCPA Fri, 06 Nov 2009 16:58:45 -0600 http://wordpress.org/?v=2.8.4 hourly 1 By: supposn http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/comment-page-1/#comment-6683 supposn Thu, 12 Jun 2008 02:08:28 +0000 http://www.bob-mcteer-blog.com/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/#comment-6683 Trade deficits harm any nation's economy. Domestic and imported goods do not differ economically after they arrive at a USA port of entry or a USA producer's shipping platform. To the extent that any portion of goods or services are produced in foreign nations (and regardless of provider’s or producer’s corporate headquarters locations), they are considered as imported rather than as domestically produced. A product or service can be proportionate mix of both domestic and foreign production. The production of goods and services require production support of other goods and/or services. The sources of production support are generally more from within rather than from beyond the producing nation’s borders. Materials and components, their transportation to the domestic producer of the goods or service, the labor, factory, farm or production machinery maintenance, tools, accountants, administration ……… (a numerous list) of production supporting goods and services are more generally produced or acquired within the nation of the final product’s producer. Regardless of its purpose to satisfy domestic or foreign purchasers, all domestic production contributes to a nation’s gross domestic product, (GDP). When a nation suffers a trade deficit, the GDP is denied the production reflected by the trade deficit itself. The GDP is additionally denied all of the production supporting goods and services that are not reflected within the deficit’s amount. USA’s trade deficit is detrimental to the GDP and thus is a net detriment to our economy. Due to the loss of production supporting goods and services the trade deficit’s detriment to the GDP exceeds the amount of the detriment itself. Anything detrimental to our GDP is also detrimental to our median wage. The GDP and median wage are the two most significant medium and long term indicators of USA's economic well being. Warren Buffett wrote of a proposal to significantly decrease USA’s trade deficit. It’s market rather than government driven. It’s self funding, not a tax and grants government no policy discretion. Respectfully, Supposn Trade deficits harm any nation's economy. Domestic and imported goods do not differ economically after they arrive at a USA port of entry or a USA producer's shipping platform. To the extent that any portion of goods or services are produced in foreign nations (and regardless of provider’s or producer’s corporate headquarters locations), they are considered as imported rather than as domestically produced. A product or service can be proportionate mix of both domestic and foreign production. The production of goods and services require production support of other goods and/or services. The sources of production support are generally more from within rather than from beyond the producing nation’s borders. Materials and components, their transportation to the domestic producer of the goods or service, the labor, factory, farm or production machinery maintenance, tools, accountants, administration ……… (a numerous list) of production supporting goods and services are more generally produced or acquired within the nation of the final product’s producer. Regardless of its purpose to satisfy domestic or foreign purchasers, all domestic production contributes to a nation’s gross domestic product, (GDP). When a nation suffers a trade deficit, the GDP is denied the production reflected by the trade deficit itself. The GDP is additionally denied all of the production supporting goods and services that are not reflected within the deficit’s amount. USA’s trade deficit is detrimental to the GDP and thus is a net detriment to our economy. Due to the loss of production supporting goods and services the trade deficit’s detriment to the GDP exceeds the amount of the detriment itself. Anything detrimental to our GDP is also detrimental to our median wage. The GDP and median wage are the two most significant medium and long term indicators of USA's economic well being. Warren Buffett wrote of a proposal to significantly decrease USA’s trade deficit. It’s market rather than government driven. It’s self funding, not a tax and grants government no policy discretion. Respectfully, Supposn

]]> By: Mike Hinton http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/comment-page-1/#comment-6345 Mike Hinton Thu, 24 Apr 2008 18:15:03 +0000 http://www.bob-mcteer-blog.com/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/#comment-6345 I was under the impression that our deficits were nothing to worry about. Foreigners own only a small portion of the overall debt for instance, and the demand for our bonds means we're paying 3-4% for what we're borrowing. I'm all for tax cuts wherever we can get them, but I don't think we are at risk for people dumping dollars. It would take a worldwide panic to depress the dollar that way. The resent dollar drop is mostly due to monetary policy, once that turns around in the near future so will the value of the dollar. I don't think there's much to worry about in our current situation. But then again, I'm a physicist, not an economist. I was under the impression that our deficits were nothing to worry about. Foreigners own only a small portion of the overall debt for instance, and the demand for our bonds means we’re paying 3-4% for what we’re borrowing. I’m all for tax cuts wherever we can get them, but I don’t think we are at risk for people dumping dollars. It would take a worldwide panic to depress the dollar that way. The resent dollar drop is mostly due to monetary policy, once that turns around in the near future so will the value of the dollar. I don’t think there’s much to worry about in our current situation. But then again, I’m a physicist, not an economist.

]]> By: MiltonF http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/comment-page-1/#comment-6325 MiltonF Wed, 16 Apr 2008 23:01:17 +0000 http://www.bob-mcteer-blog.com/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/#comment-6325 Thank you, Mr. McTeer. Nice, concise review. I'll bookmark this one. Question: Do you think the current recession (if it is one) will bring consumers back to reality and inspire them to save more and spend less? There is evidence PCE is falling, but there is no guarantee this adjustment will last. Also, how much do the recent changes in pension law and resultant practice of companies to automatically enroll new employess in defined contribution plans, play into helping increase the savings rate? Again, well done. Thank you, Mr. McTeer. Nice, concise review. I’ll bookmark this one.

Question:
Do you think the current recession (if it is one) will bring consumers back to reality and inspire them to save more and spend less? There is evidence PCE is falling, but there is no guarantee this adjustment will last.
Also, how much do the recent changes in pension law and resultant practice of companies to automatically enroll new employess in defined contribution plans, play into helping increase the savings rate?

Again, well done.

]]> By: The Budget Deficit, the Current Account Deficit and the Saving Deficit at Curious Cat Investing and Economics Blog http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/comment-page-1/#comment-6321 The Budget Deficit, the Current Account Deficit and the Saving Deficit at Curious Cat Investing and Economics Blog Tue, 15 Apr 2008 12:40:43 +0000 http://www.bob-mcteer-blog.com/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/#comment-6321 [...] a nice review of The Budget Deficit, the Current Account Deficit and the Saving Deficit: Reducing the Deficits. What are the policy implications of these interdependent imbalances? Here [...] [...] a nice review of The Budget Deficit, the Current Account Deficit and the Saving Deficit: Reducing the Deficits. What are the policy implications of these interdependent imbalances? Here [...]

]]> By: Loran Baxter http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/comment-page-1/#comment-6316 Loran Baxter Mon, 14 Apr 2008 14:18:12 +0000 http://www.bob-mcteer-blog.com/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/#comment-6316 I believe both the US congress and the administration have staff and advisors who understand how economics work. All Ivy League colleges teach economics classes. Unfortunately, politicians believe making the right choice is impossible due to political factors. At a time the economy faces a period of readjustment, maybe involving uncomfortable dislocations, congress and the administration should get together and start a “marketing campaign” to educate our population. By couching the argument as shared short term pain, i.e. lower consumer spending, in order to move the economy into a more sustainable course, maybe some of the less courageous politicians could be provided with the cover to do the right thing. I appreciate your efforts to start the education ball rolling, and urge you to take every chance to spread the word that sound fiscal and monetary policies will make the United States more prosperous in the future. I believe both the US congress and the administration have staff and advisors who understand how economics work. All Ivy League colleges teach economics classes. Unfortunately, politicians believe making the right choice is impossible due to political factors.
At a time the economy faces a period of readjustment, maybe involving uncomfortable dislocations, congress and the administration should get together and start a “marketing campaign” to educate our population. By couching the argument as shared short term pain, i.e. lower consumer spending, in order to move the economy into a more sustainable course, maybe some of the less courageous politicians could be provided with the cover to do the right thing.
I appreciate your efforts to start the education ball rolling, and urge you to take every chance to spread the word that sound fiscal and monetary policies will make the United States more prosperous in the future.

]]> By: Scott McTeer http://taxesandbudget-blog.ncpa.org/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/comment-page-1/#comment-6313 Scott McTeer Mon, 14 Apr 2008 04:13:26 +0000 http://www.bob-mcteer-blog.com/the-budget-deficit-the-current-account-deficit-and-the-saving-deficit/#comment-6313 Dad, I appreciated this ... my understanding of macro-economics was never anything to write home about, so it's good to read it now. Dad, I appreciated this … my understanding of macro-economics was never anything to write home about, so it’s good to read it now.

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