Seriously, This Explains a Lot

George KGeorge K Super ModeratorPosts: 9,811 Senior Member

Republican Senator Ben Sasse of Nebraska was interviewed on NPR Newshour today (7/24). You probably can find it on line.

Two take-aways:

  • According to Sasse the $12 Billion in welfare for all U.S farmers would barely cover the losses of Nebraska's bean farmer's this year due to Trump's tariffs, much less other farmers in his state alone. Never mind the rest of the country.

  • After several meetings with the President he has come to understand that that Mr. Trump does not understand the difference between the balance of trade and the balance of payments. In his example, the President looks at the balance of trade (in products) with Mexico, which is is in Mexico's favor, and sees it as a bad real estate deal in which we were cheated. He explained to the President more than once that when you take into account the services Mexico buys from us, and the flow of investments from Mexico to the USA, that the balance of payments is in our favor. Trump consistently brushed this aside, and fixated on the balance of trade (in products), time and time again comparing it to a bad real estate deal.

Messrs. Tillerson and Bloomberg variously called our Great Leader "a 'effing' idiot" and "a 'effing' moron". At first I took that to be hyperbole, but now I wonder........

Keep your stinkin' government hands off my Medicare.

Replies

  • StevenSteven Senior Member Posts: 3,326 Senior Member

    Uhmmmm...seriously....this explains nothing.

    Ben Sasse was a history professor, not an economist. Not surprisingly, his understanding of trade economics is both wrong and misleading.

    The balance of trade encompasses both the balance of trade in goods and the balance of trade in services.

    The balance of payments encompasses the balance of trade, remittances, foreign aid and capital transfers. While the balance of payments between countries can be in deficit or surplus in the short run due to timing differences, it must balance in the long run due to double entry accounting.

    Sasse could make the same argument for China or for OPEC back in the day...remember petrodollars?

    We run a huge balance of trade deficit with China. In order to keep the yuan from strengthening relative to the dollar, China uses its trade surplus to buy treasuries. BOP in balance.

  • StevenSteven Senior Member Posts: 3,326 Senior Member

    Upon reflection, I'll give Sasse a bit of a break and assume what he meant to say is that the dollars flowing to Mexico because of the BOT deficit comes back in dollars, creating jobs here. (For example, our trade deficit with Japan helped finance Japanese car factories here).

    Of course, there's no guarantee that these are the same types of jobs for the same types of people that support Trump.

  • StevenSteven Senior Member Posts: 3,326 Senior Member

    To this day, the scene where Hungry Joe discovers that Huple's cat really was sleeping on his face is the funniest thing I have ever read.

  • BuffcoBuffco Senior Member Posts: 10,244 Senior Member

    Brb, planting soybeans.

  • creekyguycreekyguy Posts: 301 Senior Member

    I keep my copy handy to read any time I start thinking the world makes sense.

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