Mexico is going to pay for the wall. No question.

Just by renegotiating our trade deals so we don't hemorrhage 80 billion dollars a year in trade deficits with Mexico will be akin to paying for the 10 billion dollar border wall.

It pains me how some people are so dumb they can't understand this.

How exactly does Trump get Mexico to cut a check for the wall? You know, to actually write a check...

I'm not sure it balancing the trade deficiet counts as making them pay... But you know, semantics.

Basically every academic in a relevant field and every financial group has said that Trump would be a disaster for the economy. Have you considered that maybe *you're* dumb, especially since Trump voters are far less educated than Hillary voters? That seems to indicate something to me.

Also, presumably not getting those goods from mexico means they will be replaced by more expensive local equivalents (or imports from other places, but lets just assume that we can ignore this effect).

Is having a large trade defeciet actually a problem?

A trade deficit with one country is no problem if you run a surplus with a different county. Of course, long term persistent deficits will lead to weakening of the currency which ultimately spurs export which rights the ship.

Also, soeaking of talking down to trump voters, did Michael Moore come out as supporting Trump (on the basis of protecting american jobs from globalisation?)

No I am one class away from getting my SECOND M.A. so unless you have a doctorate then don't talk to me about post-graduate school work.

Pretty funny that you neglect to mention the field.

Hehe, I'm sure Michael Moore doesn't support Trump. Globalization without setting and enforcing minimum international health/safety/environmental standards leads to a race to the bottom when it comes to wages. That is why American worker is getting hammered -- The work done overseas for less pay in countries with no regulations.

Weakening the currency is a problem, unless yours is the reserve currency of the workd (there was a time when the US dollar was the only currency on the gold standard and all other major currencieswere tradable for US dollars - basically because after world war 2 the US had everyone's gold after producing the weapons ad lend/leasing them to the allies)

If you currency always has demand - as an oil currency and reserve currency - you have a huge amount of power to print more currency than any other nation. Not sure i inderstand enough economics to make solid clains about this point; but the US dollar is pretty special in this way.

@hauta

that's a valid question. we have a trade deficit now ONLY because Mexico simply sells more to us, but also due Mexican tariffs: while we are much more lenient on them.

Trump proposes creating a tariff: say, 20% tax. the 58 millions dollar trade deficit, we'd be obtaining 11.6 million dollars worth of.

although John Oliver claims that the wall could cost nearly 70 million dollars, i've looked at it, and the probable cost is 15 million - 25 million, with yearly upkeep fees.

So the tariff would pay for a LOT of the wall... but we wouldn't get the money immediately. However, it is financially possible to do this, and it would help small businesses in the US.


the problem occurs from a lowering of ∑Demand, as well as reactionary tariffs. with that being said, there is NO clear cut answer on Trump's plan, b/c we're relying on Mexico not to raise tariffs themselves, and that's an unknown variable.

@ Michael Moore, i have seen reports that Ttump is winning over huge numbers of blue collar workers who hve been screwed by the financial crisis and subsequent austerity. The kind of people Moore usually talks about.

Being the reserve currency does permit America more latitude -- that's for sure. But you only get to be the reserve currency if the rest of the world continues to believe that you will have low inflation and sound policies. If America embarked on a major tax cutting plan, say for the rich who don't invest in America (because there are higher returns overseas), then this could trigger a shift to other strong currencies like the Euro, Pound, Yen, etc.

@Hauta

also you are misrepresenting trade deficits with countries. it IS a problem whenever a country is extra good at creating a quality product at low cost. it gives basic bargaining power to that country, and they can threat spikes in tariffs, b/c you can't trade with other countries b/c they don't have as good of a product.

so no, having a trade deficit with one country and a trade surplus with another doesn't equal economic tandem. economics occur over time, and wherever there is a deficit, you should try to deal better.

FYI, I voted for Hillary about 30 minutes ago. Trump will be too radical with Mexico, but Clinton just says "you're racist" then lets them shit on us. still:

rather the shit we know...

@Yanik, I think we are largely in agreement. But I think that there is less distortion in int'l economy if tariffs are kept low all around. If we were only one to raise the tariff (which is not likely) then the revs could pay for wall blah blah, but tariffs rises never seem to go unanswered.

@orathaic, the people that Michael Moore talks about have the right to feel frustrated. That some (or even, many) of them support Trump doesn't validate whether Trump's policies will actually benefit them.

@yanik, you remember from econ the deal about comparative advantage. Even if your country is better than my country at producing every product, economics dictates that i will produce locally the ones where your advantage is the lowest. The best way to assure prosperity is through technological superiority because that leads to better products and new markets.

@Hauta

there are higher returns overseas, because interest rates are SOOOO low.

interest rates are SOOOO low, b/c we have so much debt that raising interest rates would require a increase in gov't spending to pay off the debt, expanding the money supply...

causing inflation.


but no, cutting tax for the rich only is stupid. our progressive tax rate format is stupid. we need a proportional progressive tax rate for one, and it needs to be sloped in a shape similar to a logarithm curve. we need to inc. our ability to invest: higher taxes inc. gov't expenditures, decrease domestic investment. gov't expenditures don't always return to domestic investment in any direct way

@Hauta

and we CANT DEVELOP technological advantages without protecting our industries and allowing them to invest in expansion of themselves. i understand comparative advantage, but.... take Nigeria

they had EXTREMELY low agricultural output, and they required aid, as well as buying food from other countries. in the wake of many violent regime changes via the military, the finally were able to cut off all agricultural trade, (BEYOND a tariff) and invest heavily in infrastructure. they went into debt, their public sector deteriorated, but by the end of it, they reopened trade, and now they have self-sufficiency.


personally, i think we should reconvene and discuss NAFTA, and maybe propose revisions allowing for universal lowering or a universal ceiling on tariffs.

@yanik, I'd like to see interest rates go up. It would let some Baby Boomers retire if they knew their investment would perform. Those job vacancies could be filled by millenials.

@Hauta

where we're losing to Mexico, is an area where we have Comparative disadvantage. investing there is a mathematical black hole. frankly this all stems back to free trade, not really being "free"

@Yanik, the worst offender for corporate espionnage (and outright trademark theft) is probably China. I know America was guilty of the same thing (against Britain) at the start of the republic. America and Britain were able to become allies. Dunno if China and America can reach same conclusion.

@" the people that Michael Moore talks about have the right to feel frustrated. That some (or even, many) of them support Trump doesn't validate whether Trump's policies will actually benefit them."

Agreed. I'm just reflecting on Trump's promise to bring back production jobs to the US. The kind of isolationism and anti-NAFTA stuff which would actually appeal to a large number of otherwise disenfranchised citizens.

It doesn't make them stupid for voting in what the see as their own interest.

@yanik, mexico? The U.S. goods trade deficit with Mexico was $58 billion in 2015. The size of the US economy is 18T!!!! This deficit is microscopic in comparison.

Drudge Report has already started to call states.

....but why?

Why did Drudge concede PA?