America: Teetering on the Edge of Economic Catastrophe

Come on sweetie. I need you to hold my hand here. Once we know what numbers are we can use them to describe what?

Don’t leave me hanging here on the short bus!

Because the ability to produce goods is a measure of strength. We have lost leverage in trade negotiation with other countries due in large part to 9ur relative loss/their gain. If we don’t have the ability to produce goods that other countries need we are negotiating from a position of weakness.
Bravado doesn’t work unless it can be backed up with the ability to say fuck it, we don’t need your commodity. We have our own and we’ll produce/sell it for less.

“Because the ability to produce goods is a measure of strength. We have lost leverage in trade negotiation with other countries due in large part to 9ur relative loss/their gain. If we don’t have the ability to produce goods that other countries need we are negotiating from a position of weakness.
Bravado doesn’t work unless it can be backed up with the ability to say fuck it, we don’t need your commodity. We have our own and we’ll produce/sell it for less.”

^ Isn’t based on anything resembling international political economy. Gut impulse doesn’t cut it in discussions that involve things that can be as technical as international economics.

Manufacturing output is not a measure of strength in international politics. Military power and the economic wherewithal that underpins it is. The US far and away has the most capable armed forces and dynamic economy that the world has ever known. Annual American military expenditures nearly equal that of the next 14 states combined, and the United States economy, the lifeblood of the international economic and financial systems, accounts for 22 percent of global GDP.

Name a trade treaty in which the United States has empirically lost negotiating leverage based on the exodus of labor intensive low skilled manufacturing industries. You made a definitive claim, now provide definitive evidence. You wholly ignore the exporters need markets to sell their goods to. If the United States and China went to war tomorrow, America would have the PRC by the economic short hairs. China is far more dependent on exports to the United States and its allies than the US and its allies are dependent on Chinese imports. In addition, you ignore political and military factors that strongly influence economic statecraft. The United States forward deployed forces in Europe and Asia effectively subsidize regional defense spending by allowing those states to free ride on American extended deference. That is a hell of a lot of leverage in trade negotiations.

While some lament the negative balance of trade, the US is nonetheless the second largest export economy in the world. Apparently, it produces a lot of shit other states want and need. Does it matter in the grand scheme of things that China is the leading exporter of textiles and the US textile industry is on life support?

The self-sufficiency you speak of is not desirable. It empirically reduces domestic welfare. Autarky, a situation in which a state does not take part in international trade, is economically ruinous. States should base their trade on comparative advantage as determined by the underlying factor endowments of a country relative to the rest of the word.

We’ll make our own and sell less than world price? You think the US can match China in the textile industry through this strategy? Anti-dumping statutes and labor costs aside, do you think the American consumer will pay less or more for commodities under such an approach?

His, I said it is a measure, not the only metric in determining the strength of a currency or economy. And it isn’t just gut instinct. It is a proven strategy employed from time to time in the global oil markets too.
Just because you don’ t know what others are talking about doesn’ t mean that they don’t.
As for your rhetoric about textiles and autarky, who the fuck ever even said that? You trying to introduce a false statement just so that you can prove it wrong? Do that at your own expense.

The above represents the United State’s export economy, the 2nd largest in the world.

Read my post again. Then read it again. Then answer the questions I posed.

“States should base their trade on comparative advantage as determined by the underlying factor endowments of a country relative to the rest of the word.”

That’s my thesis.

I’m still interested to hear how the so called manufacturing exodus has forced the United States to use military force more frequently.

Then why would you bother bringing up something as insignificant as textiles?

Because it’s a protected manufacturing industry that has largely been outsourced. It’s a common refrain in protectionism vs. free trade discussions. The so called race to the bottom is an economic teleology. It’s only naturally that highly industrialized countries relinquish their low skill and labor intensive industries as they become increasingly prosperous and economically complex. Comparative advantage.

Actually, the trend I’v seen is to automate low skill positions to make them more productive, turning what was labor intensive and tedious into a single machine process and a green button operator.

The conclusions the OP and those who agree with him are based on false assumptions. Consequently, those conclusions are false. The are eerily reminiscent of Trump’s “big lie” regarding the global economy. While it’s true that a small fraction of 1970s manufacturing were outsourced, a large fraction simply disappeared. That isn’t in itself a bad thing, considering how much more productive the economy is. The service sector is fundamentally misunderstood.

Do you have economic data that refutes my assertion? Your so-called manufacturing exodus was not characterized by a 1 to 1 loss and gain for the United States and the developing world, respectively. The majority of those jobs simply disappeared as a result of increased automation. Trump’s big lie about the global economy is a blue collar jeremiad.

Wow, that’s remotely what I asked for. I stand corrected.

I haven’t really followed the thread so forgive me if this is out of place, but you can’t have an economy with such vast and expansive guranteed benefits (unemployment, social security, etc…) coupled with one of the highest corporate tax rates in the world and expect C corporations to remain in the U.S. That makes no sense from a business perspective.

If you’re a powerlifter would you pay $50 to train at the local planet fitness lunk alarm and all or $30 to train at an old school warehouse gym with a monolift and platforms?

It’s true that the U.S. has the third highest statutory corporate tax rate in the world. From my understanding, that is before tax reductions, however. A 2011 study by the Congressional Research Service put the U.S. effective corporate rate at 27.1 percent, slightly lower than the OECD average of 27.7 percent. Could the rate be lowered and could the U.S. attract even more foreign direct investment? Sure, and it should. You’re absolutely correct in that respect. Producing in the U.S. also mitigates the costs associated with barriers to trade.

World currency going digital and negative interest rate