(C) Daily Kos
This story was originally published by Daily Kos and is unaltered.
. . . . . . . . . .
Trump battles arithmetic [1]
['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']
Date: 2025-04-15
I once came across this formula in a book by Paul Krugman, whom I tend to trust as regards factual accuracy.
The basic accounting equation that describes international trade is:
S – I = X – M
Where
S = Savings, I = Investment, X = Exports, M = Imports
Thus if Savings is less than Investment (as is the case in the United States), the left side of the equation will be negative, and Exports will be lower than Imports (as is the case in the United States), so the right side of the equation will also be negative.
Because when you subtract a larger number from a smaller number, you get a negative number.
Hence you can’t have Savings less than Investment and at the same time have Exports higher than Imports, as Donald seems to want. It doesn’t work mathematically.
Maybe someone in the Trump administration should read Paul Krugman’s book, Pop Internationalism (Cambridge: MIT Press, 1996). The equation is explained on page 76.
In any case, economics experts (as far as I am aware) agree that there is nothing inherently wrong with a trade deficit.
Trump is at war with arithmetic, and it’s clear who’s going to win.
Because his problem is not the trade deficit, it’s his own MENTAL deficit.
[END]
---
[1] Url:
https://www.dailykos.com/stories/2025/4/15/2316539/-Trump-battles-arithmetic?pm_campaign=front_page&pm_source=trending&pm_medium=web
Published and (C) by Daily Kos
Content appears here under this condition or license: Site content may be used for any purpose without permission unless otherwise specified.
via Magical.Fish Gopher News Feeds:
gopher://magical.fish/1/feeds/news/dailykos/
