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“Thе U.S. hаѕ а surplus оf $20 billion wіth China аnd $1.4 trillion wіth thе rest оf thе world.” The $1.4 Trillion U.S. `Surplus’ That Trump’s Not Talking About When we talk about the US economy, do we only talk about our deficit and not income? That logic escapes Trump, No wonder he’s been bankrupt 6 times. Trump is a bald faced liar. We haven’t picked up anything except to lose about 25% of our sales to China. China, on the other hand has also lost about 25% of it’s sales to the United States. Trump lies to get the support of his base and continue on his course to destroy all the progress from previous administrations. As long as the Republican leadership supports the orange man in the mob coat, things are going to continue to spiral downward until the U.S. is an isolationist shell of a democracy.
Are you confused? Your link talks about Trump’s lie that the US was losing $100 billion to Canada. In reality, the US has a small surplus with Canada. So, our president continues to lie to make his points. Are we losing the trade balance with Mexico and China? Yes. But if you look at all the economic inputs and outputs to the US from other countries, the US has a surplus. But again, Trump doesn’t recognize that. He only cherry picks the trade deficit on products. He ignores the trade surplus of $270 we have on services. He ignores US multinational sales in a country they manufacture. He ignores FDI, He ignores tourism to the US vs to the other countries. He ignores the million or so foreign students studying in the US. They all bring ‘money’ into American jobs, businesses, and economy.
Trump’s comment conjures up images of money leaving the US, never to return. But this is not how the foreign exchange markets work. The US pays for its imports with US dollars. But suppliers in Mexico and China pay their workers and investors in Pesos and Yuan. They sell their US dollars to people who want to spend them in America. But what if trade is in deficit? What happens to the dollars, over and above the amount used to import goods from the US? They are lent to the US, or used to buy/create new physical/intellectual/financial assets in the US, so the money isn’t ‘lost’. And this investment creates jobs and increases productivity in the US, and results in cheaper mortgages and consumer credit, and so forth. Now is the foreign debt we accumulate because of these capital flows a problem? Not if the rate of return on the investments exceeds the interest payments on the debt, And not if foreign borrowing is used to smooth consumption in the presence of temporary fluctuations in income.
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