5 ms·

Yeah, but you can't really look at economies from that protectionist viewpoint. The US primarily exports services like software, consulting, tourism, etc. that

by RC_ITR 5y ago

Yeah, but you can't really look at economies from that protectionist viewpoint. The US primarily exports services like software, consulting, tourism, etc. that rely on strong foreign economies. So if that Dutch shipbuilder needs AUTOCAD and Slack to function and then the employees vacation in Miami, the US still benefits despite the final product being produced elsewhere.

PaulDavisThe1st 5y ago
What fraction of the US$500M do you think those benefits to the US might add up to?
- chairmanwow1 5y ago
  According to the Census Bureau, the trade balance between the US <==> Netherlands is +$17B in the US's favor [0]. This seems to support OP's point. [0] https://www.census.gov/foreign-trade/balance/c4210.html https://www.census.gov/foreign-trade/balance/c4210.html
  - PaulDavisThe1st 5y ago
    Do you believe that this trade imbalance makes it likely that a significant part of the US$500M Bezos reportedly spent on the boat will return to the US? The trade numbers mean that the Netherlands spent about 4.5% of its GDP (US$1T) in trade with the US. That would imply that if the boat fits into those patterns, about 22M of the 500M cost might come back to the USA. One possibility is that despite not having the boatyards in the US that could build such a vessel, the majority or even just a substantial fraction of the components that are used for the boat originate in the USA, and that in reality significantly more of the US$500m will flow back to the USA. I don't know enough about the construction of contemporary mega-yachts to know if that's likely or not.
    - justincormack 5y ago
      The US doesn't need to produce yachts (or this particular type of yacht), thats the whole idea of trade, you specialise in some things not others, and everyone ends up better off. There are a huge number of components in a yacht, many American. And financing and so on.
      - PaulDavisThe1st 5y ago
        That's not relevant to the point (although I'd also disagree with this entire premise, the root of tariff-free global trade). The point is that when someone (e.g. Bezos) spends US$500M of realized gain, it doesn't necessarily get spent in the USA. That's all.
      - FearlessNebula 5y ago
        Why would Bezos finance a 500M yacht with his net worth?
        PaulDavisThe1st 5y ago
        Same reason you might buy a pack of bubblegum.
    - RC_ITR 5y ago
      I'm just saying that, sure, that $500mn purchase doesn't exclusively benefit Americans, but if you want to force all Americans to 'Buy American,' don't be surprised when your employer's earnings/valuation go down because foreign customers stop buying their products as their economies shrink. If your argument is that we should 'Buy American' to subsidize low-skill/low-income workers while limiting the earning potential of high-skill/high-income workers, then I dig it, but honestly the easier/better solution is a more progressive tax regime/welfare state.
      - PaulDavisThe1st 5y ago
        We're talking about tax and the ultra-wealthy. We're talking about what happens when the world's richest person (+/- 2) spends US$500M of realized capital gains outside of the country of residence. I am not talking about "forc[ing] all Americans to "Buy American".
        RC_ITR 5y ago
        > It's important to keep in mind that even when that money is spent, there's no guarantee it'll be spent domestically. This is literally the comment I was replying to. As far as I can read, the parent comment was about the location of consumption and the effect that has on an economy (which I think is significantly more nuanced than the parent implied) It’s also 100% worth noting that we have no idea who bought those shares from Jeff (ignoring the fact that his liquidity is mostly from loans against his holdings). The US majorly benefits from foreigners buying shares in our companies and (surprise) that’s one of the major reasons we can support our trade imbalance. So I’m mostly just confused about your point, I guess? I think we agree that progressive taxation is probably good, but do we disagree about the effect that non-domestic consumption has on the US economy?
- Matticus_Rex 5y ago
  I get where that question comes from, but I think it's the wrong question. The real question is, how would any realistic action that would cause US companies and people to spend more of their money in the US affect global trade in the aggregate? While all participants in global trade are net beneficiaries, the US has done particularly well. Protectionism is usually a two-way affair; if we make it harder for us to spend money abroad, other countries will likely reciprocate. This doesn't somehow even out to make us (or them) better-off for doing it -- it simply contracts the global division of labor and introduces deadweight loss, decreasing the overall efficiency of the system and making all parties worse-off... except for a few well-connected companies that get artificially protected from competition and have enough connections to lobby successfully for price supports or other pork benefits.
  - PaulDavisThe1st 5y ago
    It's not about making it harder to spend money abroad (at least not in this context). It's about a tax structure that some mitigates against the downsides of the ultra-rich realizing capital gains and spending the proceeds outside their country of residence.

by RC_ITR 5y ago

PaulDavisThe1st 5y ago

What fraction of the US$500M do you think those benefits to the US might add up to?

chairmanwow1 5y ago
According to the Census Bureau, the trade balance between the US <==> Netherlands is +$17B in the US's favor [0]. This seems to support OP's point. [0] https://www.census.gov/foreign-trade/balance/c4210.html https://www.census.gov/foreign-trade/balance/c4210.html
- PaulDavisThe1st 5y ago
  Do you believe that this trade imbalance makes it likely that a significant part of the US$500M Bezos reportedly spent on the boat will return to the US? The trade numbers mean that the Netherlands spent about 4.5% of its GDP (US$1T) in trade with the US. That would imply that if the boat fits into those patterns, about 22M of the 500M cost might come back to the USA. One possibility is that despite not having the boatyards in the US that could build such a vessel, the majority or even just a substantial fraction of the components that are used for the boat originate in the USA, and that in reality significantly more of the US$500m will flow back to the USA. I don't know enough about the construction of contemporary mega-yachts to know if that's likely or not.
  - justincormack 5y ago
    The US doesn't need to produce yachts (or this particular type of yacht), thats the whole idea of trade, you specialise in some things not others, and everyone ends up better off. There are a huge number of components in a yacht, many American. And financing and so on.
    - PaulDavisThe1st 5y ago
      That's not relevant to the point (although I'd also disagree with this entire premise, the root of tariff-free global trade). The point is that when someone (e.g. Bezos) spends US$500M of realized gain, it doesn't necessarily get spent in the USA. That's all.
    - FearlessNebula 5y ago
      Why would Bezos finance a 500M yacht with his net worth?
      - PaulDavisThe1st 5y ago
        Same reason you might buy a pack of bubblegum.
  - RC_ITR 5y ago
    I'm just saying that, sure, that $500mn purchase doesn't exclusively benefit Americans, but if you want to force all Americans to 'Buy American,' don't be surprised when your employer's earnings/valuation go down because foreign customers stop buying their products as their economies shrink. If your argument is that we should 'Buy American' to subsidize low-skill/low-income workers while limiting the earning potential of high-skill/high-income workers, then I dig it, but honestly the easier/better solution is a more progressive tax regime/welfare state.
    - PaulDavisThe1st 5y ago
      We're talking about tax and the ultra-wealthy. We're talking about what happens when the world's richest person (+/- 2) spends US$500M of realized capital gains outside of the country of residence. I am not talking about "forc[ing] all Americans to "Buy American".
      - RC_ITR 5y ago
        > It's important to keep in mind that even when that money is spent, there's no guarantee it'll be spent domestically. This is literally the comment I was replying to. As far as I can read, the parent comment was about the location of consumption and the effect that has on an economy (which I think is significantly more nuanced than the parent implied) It’s also 100% worth noting that we have no idea who bought those shares from Jeff (ignoring the fact that his liquidity is mostly from loans against his holdings). The US majorly benefits from foreigners buying shares in our companies and (surprise) that’s one of the major reasons we can support our trade imbalance. So I’m mostly just confused about your point, I guess? I think we agree that progressive taxation is probably good, but do we disagree about the effect that non-domestic consumption has on the US economy?
Matticus_Rex 5y ago
I get where that question comes from, but I think it's the wrong question. The real question is, how would any realistic action that would cause US companies and people to spend more of their money in the US affect global trade in the aggregate? While all participants in global trade are net beneficiaries, the US has done particularly well. Protectionism is usually a two-way affair; if we make it harder for us to spend money abroad, other countries will likely reciprocate. This doesn't somehow even out to make us (or them) better-off for doing it -- it simply contracts the global division of labor and introduces deadweight loss, decreasing the overall efficiency of the system and making all parties worse-off... except for a few well-connected companies that get artificially protected from competition and have enough connections to lobby successfully for price supports or other pork benefits.
- PaulDavisThe1st 5y ago
  It's not about making it harder to spend money abroad (at least not in this context). It's about a tax structure that some mitigates against the downsides of the ultra-rich realizing capital gains and spending the proceeds outside their country of residence.