{"id":9404,"date":"2014-03-08T15:32:43","date_gmt":"2014-03-08T20:32:43","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=9404"},"modified":"2014-03-08T15:32:43","modified_gmt":"2014-03-08T20:32:43","slug":"in-the-real-world-the-trade-deficit-is-more-important-than-the-budget-deficit-cepr","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2014\/03\/08\/in-the-real-world-the-trade-deficit-is-more-important-than-the-budget-deficit-cepr\/","title":{"rendered":"In the Real World the Trade Deficit Is More Important Than the Budget Deficit | CEPR"},"content":{"rendered":"<p>Dean Baker writes:<\/p>\n<blockquote>\n<p>&#8230;.the trade deficit is a direct measure of the amount of demand that is going overseas rather than being spent here. This represents income generated in the United States that is not creating demand in the United States. By definition, this lost demand must be made up by other borrowing, either by the public sector (i.e. budget deficits) or the private sector. Currently the trade deficit is running at an annual rate of around $480 billion (@ 3.0 percent of GDP), which means that the sum of net borrowing in the public and private sector must be equal to $480 billion.<\/p>\n<\/blockquote>\n<p>Read more at <a href='http:\/\/www.cepr.net\/index.php\/blogs\/beat-the-press\/in-the-real-world-the-trade-deficit-is-more-important-than-the-budget-deficit'>In the Real World the Trade Deficit Is More Important Than the Budget Deficit | Beat the Press<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dean Baker writes: &#8230;.the trade deficit is a direct measure of the amount of demand that is going overseas rather than being spent here. This represents income generated in the United States that is not creating demand in the United States. By definition, this lost demand must be made up by other borrowing, either by &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2014\/03\/08\/in-the-real-world-the-trade-deficit-is-more-important-than-the-budget-deficit-cepr\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;In the Real World the Trade Deficit Is More Important Than the Budget Deficit | CEPR&#8221;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5,34],"tags":[512,3450],"class_list":["post-9404","post","type-post","status-publish","format-standard","hentry","category-economy","category-us-canada-countries-regions","tag-budget-deficit","tag-trade-deficit"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>In the Real World the Trade Deficit Is More Important Than the Budget Deficit | CEPR - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"In the Real World the Trade Deficit Is More Important Than the Budget Deficit | CEPR - the patient investor\" \/>\n<meta property=\"og:description\" content=\"Dean Baker writes: &#8230;.the trade deficit is a direct measure of the amount of demand that is going overseas rather than being spent here. This represents income generated in the United States that is not creating demand in the United States. 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The key to understanding Godley's analysis is that the sum of the four sectors is always zero. If one sector runs a deficit, it must be funded by a surplus in another\u2026","rel":"","context":"In &quot;China &amp; HK&quot;","block_context":{"text":"China &amp; HK","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/china-hk\/"},"img":{"alt_text":"Output Gap: Wikipedia","src":"http:\/\/upload.wikimedia.org\/wikipedia\/commons\/thumb\/0\/0a\/Actual_potential_GDP_output_gap_CBO_Jan_09_outlook.png\/250px-Actual_potential_GDP_output_gap_CBO_Jan_09_outlook.png","width":350,"height":200},"classes":[]},{"id":62235,"url":"https:\/\/thepatientinvestor.com\/index.php\/2025\/08\/06\/tariffs-the-good-the-bad-and-the-ugly\/","url_meta":{"origin":9404,"position":1},"title":"Tariffs &#8211; the good, the bad, and the ugly","author":"Colin Twiggs","date":"August 6, 2025","format":false,"excerpt":"Key Points US tariff receipts rose to $29.6bn in July The June trade deficit with China fell to the lowest in more than twenty years However, the ISM Services PMI reports declining employment The report also highlights soaring prices as tariffs take effect And large manufacturers warn of rising costs\u2026","rel":"","context":"In &quot;China &amp; HK&quot;","block_context":{"text":"China &amp; HK","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/china-hk\/"},"img":{"alt_text":"BEA: Trade Deficit","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-05-kobeissi-tariffs.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-05-kobeissi-tariffs.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2025\/2025-08-05-kobeissi-tariffs.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":2276,"url":"https:\/\/thepatientinvestor.com\/index.php\/2011\/11\/22\/the-wages-of-economic-ignorance-robert-skidelsky-project-syndicate\/","url_meta":{"origin":9404,"position":2},"title":"The Wages of Economic Ignorance &#8211; Robert Skidelsky &#8211; Project Syndicate","author":"ColinTwiggs","date":"November 22, 2011","format":false,"excerpt":"Despite austerity, the forecast of this year\u2019s UK structural deficit has increased from 6.5% to 8% \u2013 requiring an extra \u00a322 billion ($34.6 billion) in cuts a year. Prime Minister David Cameron and Chancellor George Osborne blame the eurozone crisis; in fact, their own economic illiteracy is to blame. Unfortunately\u2026","rel":"","context":"In &quot;UK &amp; Europe&quot;","block_context":{"text":"UK &amp; Europe","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/uk-europe-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":59481,"url":"https:\/\/thepatientinvestor.com\/index.php\/2024\/11\/26\/tariffs-trade-wars-and-the-triffin-dilemma\/","url_meta":{"origin":9404,"position":3},"title":"Tariffs, trade wars, and the Triffin dilemma","author":"Colin Twiggs","date":"November 26, 2024","format":false,"excerpt":"Free markets and global trade are great as long as everyone follows the rules and shares the surplus created. However, history shows that there are always actors who are prepared to further their interests at the expense of others. Many countries have employed beggar-thy-neighbor trade strategies to boost their manufacturing\u2026","rel":"","context":"In &quot;China &amp; HK&quot;","block_context":{"text":"China &amp; HK","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/china-hk\/"},"img":{"alt_text":"US Manufacturing Jobs","src":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2024\/2024-11-25-mnfg-jobs.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2024\/2024-11-25-mnfg-jobs.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/www.incrediblecharts.com\/images\/2024\/2024-11-25-mnfg-jobs.png?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":11804,"url":"https:\/\/thepatientinvestor.com\/index.php\/2015\/05\/12\/federal-budget-2015-worst-cumulative-deficits-in-60-years-chris-joye\/","url_meta":{"origin":9404,"position":4},"title":"Federal budget 2015: worst cumulative deficits in 60 years | Chris Joye","author":"ColinTwiggs","date":"May 12, 2015","format":false,"excerpt":"Chris Joye (AFR) on the budget deficit: There are two critical differences in 2015 that make Australia's current debt burden [42.2% of GDP] much more troubling than that serviced by previous generations. Back in the 1977 and 1983 recessions, the household debt-to-income ratio was only 34 per cent and 37\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"International Liabilities of Australian Banks","src":"https:\/\/i0.wp.com\/www.macrobusiness.com.au\/wp-content\/uploads\/2014\/06\/erteq-300x209.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":24841,"url":"https:\/\/thepatientinvestor.com\/index.php\/2021\/03\/27\/decline-of-the-us-dollar\/","url_meta":{"origin":9404,"position":5},"title":"Decline of the US Dollar","author":"Colin Twiggs","date":"March 27, 2021","format":false,"excerpt":"In 1971 Richard Nixon took the US Dollar off the gold standard, creating the first reserve currency based on fiat. He had no choice. 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