Skip to main content

View Diary: U.S. food production continues its race to the bottom: approves sale of Smithfield to China (30 comments)

Comment Preferences

  •  Warren Mosler, of Modern Monetary Theory, or Soft (0+ / 0-)

    Currency Economics, has been making this point for a long time.

    It's imports that matter.  That our trade deficit is a good thing, cuz we're exchanging paper (or really electronic points) for real stuff.

    Thus we create real savings in real stuff -- like labor and natural resources.

    And China gets labor deficits and pollution.  Well, and also dollars, with which they can purchase dollar denominated stuff.

    They have lots of dollars due to our trade deficit, so, um, it's a bit disconcerting that they can buy food production (which means exporting our soil) so we get "cheaper" crap.

    Especially since we aren't treating our labor savings as a savings, but merely the unemployed.

    If our new leisure class were treated as labor savings, then we'd replace the dollars devoted to conducting foreign trade for our own domestic use.

    But the deficit hawks always forget to talk about the trade deficit and how that means that if the US creates $10 new dollars (deficit spends), and $5 are devoted to conducting foreign trade, then that leaves only $5 for the domestic sector -- both public and private.

    And without the US fed gov making up for the foreign trade sector's demand for dollars, those "cheaper" goods just got real expensive.

    So, we're funding foreign trade -- not through taxes (which don't fund the fed gov), but through giving dollars to the foreign trade sector of the economy without replenishing at the same rate both the public and/or domestic private sectors.

    Now back to selling our soil to China.....  which they can afford to buy because you and I, and anyone not involved in conducting foreign trade, fund those who do.

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site