Skip to main content

View Diary: How much longer can the Austerians and their puppets go on with their failed policies and lies? (125 comments)

Comment Preferences

  •  given the monetary involvement (0+ / 0-)

    I was not arguing for autarky but for balance.

    ______
    "Und wer nicht tanzen will am Schluss - weiß noch nicht dass er tanzen muss", Rammstein, "Amerika"

    by cris0000 on Tue Jan 29, 2013 at 04:29:21 PM PST

    [ Parent ]

    •  sorry, I don't see what you're getting at (3+ / 0-)
      Recommended by:
      mrkvica, aguadito, Reston history guy

      Perhaps I'm mistaken (I am far from an expert), but I thought that the trade balance was measured by taking the value of total domestic production and subtracting the value of total imports.

      What does that have to do with balancing the government's budget? Will cutting government spending in and of itself cause domestic production to increase, or imports to decrease?

      "In America, the law is king." --Thomas Paine

      by limpidglass on Tue Jan 29, 2013 at 05:22:54 PM PST

      [ Parent ]

      •  I'm afraid you are in error here. (2+ / 0-)
        Recommended by:
        katiec, Azazello

        The trade balance  is the difference between the monetary value of exports and imports. The current accounts balance also factors in unilateral cash transfers (e.g local workers sending money abroad to their families) and capital income.

        The argument with the balanced budget is that with a negative current accounts balance foreign debt is rising. So somebody has to take hat debt - either the state (then you have a budget deficit) or the private sector.  The diarist's assumption is that since the private sector will not be able to asorb much more debt, it is necessarily the public sector (the state) who will have to maintain a budget deficit for the foreseeable future.

        ______
        "Und wer nicht tanzen will am Schluss - weiß noch nicht dass er tanzen muss", Rammstein, "Amerika"

        by cris0000 on Wed Jan 30, 2013 at 12:03:08 PM PST

        [ Parent ]

        •  In application... (1+ / 0-)
          Recommended by:
          limpidglass

          ....for all intents and purposes you can just say trade deficit = current account deficit,  at least in the US.

          So rhetorically you are right to distinguish them, but in a policy discussion (magnitude and effects on balance of other figures) it makes no real difference.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site