Friday, April 6, 2018
TRADE DEFICITS
Trump claims that other countries take our money when we run deficits in trade with them. I am also told that American companies are holding trillions of dollars, offshore so as not to have to pay taxes on income earned abroad. I wonder if there is any connection between our trade deficits, which run into the billions, and money, in the trillions being held offshore by those American firms.
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Received from Bob Ferreira
ReplyDeleteandrewsvalley
2:38 PM (29 minutes ago)
to me
Somehow can’t post to your blog. Here is my response:
If other countries take our paper money for real goods, why is that bad. On the other hand, why is it good to take our paper money back and send them real goods? Why isn't keeping trillions of dollars offshore a good thing? Won't trillions of more dollars in our domestic economy cause inflation and make real goods more expensive? Why is it bad that the Chinese require us to exchange intellectual capital for the differential cost of cheap labor? Will not the result be that increased Chinese domestic consumption will drive up the cost of their manufactures and all that will happen is that they will have to ask for more paper money for real goods? The real question is what is the cost of our paper money and there we find the real problem - the Federal Reserve banking system.
Bob Ferreira
Executive Director
Andrews Valley Initiative
828-644-3471 (C)
Bob, not only is your comment right on target with respects trade deficits in general, but I agree with you as to details, however, the question I'm raising is how do we know if we even have a deficit, to begin with, if corporations skim profits off the top and send them to a third country, in tax sanctuary?
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