Originally posted by Kieran
I'm just learning here,
Same here.
but... even if we do consume more than we produce, it's a market no one really wants to lose.
But why not lose it.
Say the US trades France 100 laptops for 100 chiars. Great everyone benefits. The US gets some wine, and the French get some caculators.
But apparently with the trade deficate the US gets 100 chairs and France gets US dollars. French government than taxes it's citizens, buys the dollars from the carpenter with those francs and sticks the US dollars in a vault.
US gets chairs, Frances gets pieces of paper that it can't use, because if it uses pieces of paper the paper looses value. So France is really getting nothing usable in exchange. For all intents and purposes the carpenter is working for the US for free.
Now apparently, it would be much better for France to let that carpenter go out of business, and have him work in an industry that would actually benefit France.
As for manufacturing... that's easy. We just start manufacturing again and put some of these people back to work. Essential industries first of course, but eventually consumer markets as well. It will be hard for a while, but we'll be fine in the long haul.
Yes it would be hard. Because meanwhilel US chair manufactures go out of business, because they can't compete with the price of the "free" chairs from France. Not only does his business go, but the infrasture for the chair industry and the know-how involve with setting up the infrustrure and producing chairs. Long, painful process to relearn.
At least I believe this is what miko is saying, if I remember his past examples correctly.
And
please don't take this as anti-americanism. If I truely was I would gleefully keep my mouth shut and not try and give this warning.