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"balanced trade" is just a euphemism for handouts to inept domestic businesses who dont want to compete with superior foreign goods. So seriously folks, stop circlejerking "muy middle class" and focus on producing high tech products that you have a comparative advantage on like shale oil, aircraft, software, and medical goods, rather than worrying about some high school dropout factory worker who isnt willing to skill up.
Trade deficits are only a problem if you're holding to the long-discredited concepts of Mercantilism like it's still 1750 and you want to build up stockpiles of gold/silver to fund your next war.
Think of trade deficits this way: If you make $100,000 a year because you're exceptionally productive, and your neighbor makes $50,000 a year because they're less productive, do you stand around wringing your hands in worry if you spend more than your neighbor? Of course not, because your greater income effectively gives you more disposable income than your less productive neighbor.
In regards to the middle class, they've been shrinking largely due to moving into higher income brackets (go check the data, the media is loath to report on this). The portions of the middle class who have shrunk are semi-skilled labor who were under the delusional impression that they could stick with the same skillset they had in the 1950s and still breeze through life, which isnt the case. Why this is the case should be obvious - WWII no longer has the rest of the world's manufacturing base left as a bombed out ruin, so competition is greater.
TLDR: Trade deficits only matter if you dont have a huge GDP per capita lead, and the middle class shrinking is largely driven by wage growth in high skill positions pushing people up.
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[–] daskapitalist ago
"balanced trade" is just a euphemism for handouts to inept domestic businesses who dont want to compete with superior foreign goods. So seriously folks, stop circlejerking "muy middle class" and focus on producing high tech products that you have a comparative advantage on like shale oil, aircraft, software, and medical goods, rather than worrying about some high school dropout factory worker who isnt willing to skill up.
[–] 8Ball [S] ago
So trade deficits are good? And the middle class should be decimated on purpose?
[–] daskapitalist ago
Trade deficits are only a problem if you're holding to the long-discredited concepts of Mercantilism like it's still 1750 and you want to build up stockpiles of gold/silver to fund your next war.
Think of trade deficits this way: If you make $100,000 a year because you're exceptionally productive, and your neighbor makes $50,000 a year because they're less productive, do you stand around wringing your hands in worry if you spend more than your neighbor? Of course not, because your greater income effectively gives you more disposable income than your less productive neighbor.
In regards to the middle class, they've been shrinking largely due to moving into higher income brackets (go check the data, the media is loath to report on this). The portions of the middle class who have shrunk are semi-skilled labor who were under the delusional impression that they could stick with the same skillset they had in the 1950s and still breeze through life, which isnt the case. Why this is the case should be obvious - WWII no longer has the rest of the world's manufacturing base left as a bombed out ruin, so competition is greater.
TLDR: Trade deficits only matter if you dont have a huge GDP per capita lead, and the middle class shrinking is largely driven by wage growth in high skill positions pushing people up.