2 ms·

> Given the $2T deficit, it's not clear this optimal strategy for our grandchildren. The deficit doesn't matter: 1) we owe money that we print ourselves, and 2

> Given the $2T deficit, it's not clear this optimal strategy for our grandchildren. The deficit doesn't matter: 1) we owe money that we print ourselves, and 2) reducing public debt just expands private debt. That being said, I think that Trump's economic strategy is smartly focused on the real problem, which is the massive trade deficits that we've been running since Reagan. The problem isn't government debt, it's foreign debt. Cutting government spending with a continuing trade deficit just forces the private sector to borrow more to make up for lack of government spending. https://openoregon.pressbooks.pub/socialprovisioning2/chapter/how-government-borrowing-affects-investment-and-the-trade-balance/ https://openoregon.pressbooks.pub/socialprovisioning2/chapte... We're not borrowing anything from future taxpayers. We are building the world we will hand to them. The problem isn't the degree of investment, if it were effective (i.e. profitable) investment it would obviously be good. The problem is if we're investing money badly. Endlessly borrowing in order to buy imports is an obvious sign of domestic malinvestment. When government is failing, it should be not be getting any smaller. It should be expanding and improving the things that work while reforming, replacing, or eliminating the things that don't. Conservatives only seem to understand this when demanding crackdowns on poor people committing street crime. edit: cheerful perspective for Trump cynics from Varoufakis: https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterplan/ https://unherd.com/2025/02/why-trumps-tariffs-are-a-masterpl...

Analemma_ 2y ago
Trade deficits are good, they are a privilege of empire. Foreign countries give us finished goods and services, and in return we give them green pieces of paper, which most of the time they give straight back to us in investment. What's bad about that? Thinking trade deficits are bad is just discredited mercantilism with a new coat of paint.
- pessimizer 2y ago
  Because eventually people will stop taking your green pieces of paper, and you won't have the domestic infrastructure left to physically attack them and take their goods like you once could? Thinking trade deficits are good never had an argument behind it, it was a retroactive justification for domestic infrastructure neglect, government cuts, and the coddling of the wealthy that began with the Reagan administration. The arguments for it are similar to the arguments for running a bunch of personal credit card debt "It's free money, take it, let them try to get it back." The USA can't live as a parasite forever.

Analemma_ 2y ago

Trade deficits are good, they are a privilege of empire. Foreign countries give us finished goods and services, and in return we give them green pieces of paper, which most of the time they give straight back to us in investment. What's bad about that? Thinking trade deficits are bad is just discredited mercantilism with a new coat of paint.

pessimizer 2y ago
Because eventually people will stop taking your green pieces of paper, and you won't have the domestic infrastructure left to physically attack them and take their goods like you once could? Thinking trade deficits are good never had an argument behind it, it was a retroactive justification for domestic infrastructure neglect, government cuts, and the coddling of the wealthy that began with the Reagan administration. The arguments for it are similar to the arguments for running a bunch of personal credit card debt "It's free money, take it, let them try to get it back." The USA can't live as a parasite forever.