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Getting real physical products in exchange for imaginary numbers and services is a good deal? We sell a lot of software?

rayiner 1y ago
Living on a farm and getting three square meals a day is a good deal… until it isn’t.
- johnisgood 1y ago
  There are always trade offs. I want to live on a farm, but at the same time, I need a relatively quick access to hospitals.
  - rayiner 1y ago
    It’s a joke about short sighted farm animals thinking they have it good not seeing the big picture.
    - johnisgood 1y ago
      Oh! Okay, I understand it now, my bad. :D
    - rightbyte 1y ago
      You need to add "free" to that joke.
GordonAShumway 1y ago
The US runs a $1T surplus in services.
- logankeenan 1y ago
  Do you have a source for that? Recently, I was trying to understand the trade deficit when consider services, but couldn’t find anything credible
- throw0101c 1y ago
  > The US runs a $1T surplus in services. The total export of services is $1T / $1000B (in 2023): * https://www.bea.gov/data/intl-trade-investment/international-services-expanded https://www.bea.gov/data/intl-trade-investment/international... It imports $0.7T / $700B worth of services, so the surplus is $300B.
deleted 1y ago
[deleted]
pydry 1y ago
It seems great until those imaginary numbers become worthless overnight. Then you might have a bit of an "oh shit" moment as you realize that the industrial ecosystem required to substitute those imports would take a decade and a half to build even if your money were worth something, which it now isnt. Lots of countries collapse due to overreliance on foreign imports. Argentina never recovered from its peak in the 1920s - it just kept bouncing from crisis to crisis. This is looking like an increasingly plausible outcome for the US.
- a2128 1y ago
  Why would they become worthless? The entire world is forever beholden to Microsoft Windows, Office, AWS, X, iOS, Google Play, whether people like it or not. People have made free or cheaper or local or better alternatives and they have never succeeded at dethroning these
  - pydry 1y ago
    I was talking about the US as a reserve currency. That's what is driving the deficit and how the US has been exchanging bits on a screen for free stuff for the last ~50 years or so. It would collapse in value overnight if there were a run on the dollar (treasury holdings were sold off). Then hyperinflation would set in and import dependence would become existential.
  - vehemenz 1y ago
    > Microsoft Windows, Office, AWS, X, iOS, Google Play One of these things is not like the others.
    - tartuffe78 1y ago
      Laughably so... 1. The operating system running a lot of corporate software 2. Productivity suite that is still the standard for creating documents 3. Cloud infrastructure that scales to any demand 4. Porn and racism 5/6. The worlds only mobile operating systems and dominant app stores
  - 1y ago
andomar 1y ago
Sales of software to a foreign entity count as export.
corimaith 1y ago
I really don't think discussion of complex topics should be reductively reduced to snarky xkcd comics that aren't even right. Current account deficit already accounts for both goods & services. From a more formal perspective, deficts aren't neccessairly bad if they're being routed into productive investments at home, as with many developing countries needing to import machinery, but if it's being used to fund consumption, and it's persistent, then it's considered by many (including the IMF) to be unsustainable on the long term, and highly unstable on the short term. The current account deficit can be also expressed as the gap between investment and savings, of which must be financed by a combination of private and public debt to external investment, of which around 50% comes from the ever-growing US Gov debt. You're basically going into debt to finance your consumption, and it's a big reason why the US credit ratings have been going down this decade. You won't fix the debt without addressing the deficit, and can you really count for growth to exceed the interest forever? When the black swan comes, then it's gonna hurt alot more than it needs to be.
- watwut 1y ago
  Well, as it happens, US Gov debt is about to become worst. And that part has only little to do with trade deficit.
  - corimaith 1y ago
    Current Account Balance = Trade Balance + Net Income + Net Transfers = Savings - Investment. As trade balance is usually the largest part of the current account, a trade deficit is usually the current account deficit, which means savings is less than investment. The difference between the two, aka the deficit thus must bridged via foreign financing, of which 50% is done by the US Gov via IOUs such as treasuries. So there is a relation between the gov debt and overall debt, in the Twin Deficits Hypothesis.
    - watwut 1y ago
      US goverment is about to become much bigger, because of the goverment lowering govermental income (lower taxes + slashing tax collection and enforcement).

rayiner 1y ago

Living on a farm and getting three square meals a day is a good deal… until it isn’t.

johnisgood 1y ago
There are always trade offs. I want to live on a farm, but at the same time, I need a relatively quick access to hospitals.
- rayiner 1y ago
  It’s a joke about short sighted farm animals thinking they have it good not seeing the big picture.
  - johnisgood 1y ago
    Oh! Okay, I understand it now, my bad. :D
  - rightbyte 1y ago
    You need to add "free" to that joke.

GordonAShumway 1y ago

The US runs a $1T surplus in services.

logankeenan 1y ago
Do you have a source for that? Recently, I was trying to understand the trade deficit when consider services, but couldn’t find anything credible
throw0101c 1y ago
> The US runs a $1T surplus in services. The total export of services is $1T / $1000B (in 2023): * https://www.bea.gov/data/intl-trade-investment/international-services-expanded https://www.bea.gov/data/intl-trade-investment/international... It imports $0.7T / $700B worth of services, so the surplus is $300B.

deleted 1y ago

[deleted]

pydry 1y ago

It seems great until those imaginary numbers become worthless overnight. Then you might have a bit of an "oh shit" moment as you realize that the industrial ecosystem required to substitute those imports would take a decade and a half to build even if your money were worth something, which it now isnt. Lots of countries collapse due to overreliance on foreign imports. Argentina never recovered from its peak in the 1920s - it just kept bouncing from crisis to crisis. This is looking like an increasingly plausible outcome for the US.

a2128 1y ago
Why would they become worthless? The entire world is forever beholden to Microsoft Windows, Office, AWS, X, iOS, Google Play, whether people like it or not. People have made free or cheaper or local or better alternatives and they have never succeeded at dethroning these
- pydry 1y ago
  I was talking about the US as a reserve currency. That's what is driving the deficit and how the US has been exchanging bits on a screen for free stuff for the last ~50 years or so. It would collapse in value overnight if there were a run on the dollar (treasury holdings were sold off). Then hyperinflation would set in and import dependence would become existential.
- vehemenz 1y ago
  > Microsoft Windows, Office, AWS, X, iOS, Google Play One of these things is not like the others.
  - tartuffe78 1y ago
    Laughably so... 1. The operating system running a lot of corporate software 2. Productivity suite that is still the standard for creating documents 3. Cloud infrastructure that scales to any demand 4. Porn and racism 5/6. The worlds only mobile operating systems and dominant app stores
- 1y ago

andomar 1y ago

Sales of software to a foreign entity count as export.

corimaith 1y ago

I really don't think discussion of complex topics should be reductively reduced to snarky xkcd comics that aren't even right. Current account deficit already accounts for both goods & services. From a more formal perspective, deficts aren't neccessairly bad if they're being routed into productive investments at home, as with many developing countries needing to import machinery, but if it's being used to fund consumption, and it's persistent, then it's considered by many (including the IMF) to be unsustainable on the long term, and highly unstable on the short term. The current account deficit can be also expressed as the gap between investment and savings, of which must be financed by a combination of private and public debt to external investment, of which around 50% comes from the ever-growing US Gov debt. You're basically going into debt to finance your consumption, and it's a big reason why the US credit ratings have been going down this decade. You won't fix the debt without addressing the deficit, and can you really count for growth to exceed the interest forever? When the black swan comes, then it's gonna hurt alot more than it needs to be.

watwut 1y ago
Well, as it happens, US Gov debt is about to become worst. And that part has only little to do with trade deficit.
- corimaith 1y ago
  Current Account Balance = Trade Balance + Net Income + Net Transfers = Savings - Investment. As trade balance is usually the largest part of the current account, a trade deficit is usually the current account deficit, which means savings is less than investment. The difference between the two, aka the deficit thus must bridged via foreign financing, of which 50% is done by the US Gov via IOUs such as treasuries. So there is a relation between the gov debt and overall debt, in the Twin Deficits Hypothesis.
  - watwut 1y ago
    US goverment is about to become much bigger, because of the goverment lowering govermental income (lower taxes + slashing tax collection and enforcement).