(06-07-2019, 08:07 AM)The Real Marty Wrote:

(06-07-2019, 06:28 AM)flsprtsgod Wrote: The international market is not free when some countries can engage in slave labor practices and intellectual property theft to compete. Our government exists to prevent us from losing to those countries but somewhere along the line we lost our way.

Yes, but we've kind of been intentionally "losing."  Trade deficits are what is keeping interest rates low on ~$20 trillion of US government debt.  

Someone who is more of an expert on economics can correct me if I am wrong, but my impression is, IF China (for example) exchanges the excess dollars they have on the world currency markets, that would weaken the dollar and make imports more expensive, and the trade deficit would largely correct itself.  But instead, in order to manipulate their currency against ours, they use the dollars to buy US government bonds.  That keeps the dollar strong and the renminbi weak, which keeps our exports expensive and their exports cheap, and enables China to export lots more stuff to the US.  But if they and everyone else stop doing this, interest rates on US government bonds will go up, and the US government will face bankruptcy because they cannot service the interest on the ~$20 trillion in debt.  

Another way to put it is, a strong dollar policy enables the US government to borrow loads of money at low interest rates, but it also causes trade deficits.  

So, it's not quite such a simple problem as "fixing the trade deficit."  There are loads of consequences that need to be worked through.  

Basically, if we want to fix trade deficits, we MUST also fix US government budget deficits.