Differences

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--- deficit [2026/09/18 11:09] – ultracomfy
+++ deficit [2026/09/18 11:55] (current) – ultracomfy
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 ====== Trade Deficit ======
+The United States of America is a country that, economically, does a lot of imports. Particularly, the US imports a lot of machinery, nuclear reactors, boilers, and electrical and electronic equipment. These alone constitute an import value of over 1.1Tr USD or, in other words, the United States buys machinery and all of the above worth over 1.1Tr from other countries.
+The United States has one of the biggest economies of the world, buying as much as 1Tr USD worth of stuff from other countries isn't unusual, right? What's happening here is that the United States wants a particular product and, instead of bartering cows and goats like savages, uses money as a means of exchange to complete the transaction. //This// is basically a trade deficit. If the new year just started and this was the first ever trade of that year, the United States would have a trade deficit of 1.1Tr USD at that moment. Importantly though, the United States hasn't "lost" any money. It bought a product for money. It received goods in return. The most you could say is that money has exited the United States, but that isn't a loss. **Deficit isn't loss, and trade deficit isn't loss either.**
+The deficit is a result of a mathematical operation called subtraction, in this case that the United States buys more from other countries than other countries sell to it. This is just how trade works, all of this is voluntary. If the United States is unhappy with the prices then it can just not buy, or not sell. The United States is engaging in normal global trade and it just so happens that the United States needs more stuff from other countries than it has on offer for others. Again, //deficit is not inherently bad, a deficit is the result of a subtraction//. In the US's case, this is because the US is a service economy and doesn't rely on exports to work. Countries with oil or bananas typically rely on their exports and therefore have a trade surplus, but that too only means that they sell more than they buy, not that anyone is losing money.
+Any transaction where a good is bought in exchange of money necessarily implies a trading deficit. To avoid trading deficit, one would have to go out of their way to buy something in exchange for another good instead of just using money. In a way, Trump disliking the trade deficit so much kind of implies that he thinks that all transactions involving money are a bad thing, and that we should indeed go back to bartering with physical items.
+Of course he does not actually believe that (especially considering that Trump values the United States Dollar quite a bit and wants to continue using it and wants it to continue to be the world's reserve currency) but that is because he does not know what the trade deficit really is. Now personally, as a true United States patriot, I am fully in favor of more "Made in USA". But even if that would reduce the trade deficit, it only means that the United States would be exporting more. That's all. There is no loss here, no problem to be solved, the United States is not victim of a global trading conspiracy, nobody is losing money. Countries are trading money for goods, and that has been like this and will continue to be like this for a long, long time to come.