[AbrahamParangi]

The tariffs have been highly destructive to local manufacturing because in the US we mostly build complex things made out of simpler parts which we import. The cost of everything we build simply increased and as a result many businesses selling relatively higher margin, higher complexity products had to scale back or shut down.

More to the point, the notion that dollars leaving the country is a real problem is really a kind of primitive understanding of money. Dollars are something we control. If dollars leave the country, that means there is demand for dollars. We control the supply of dollars. We literally can’t lose, so long as people are still using the USD, which they’re less inclined to when we’re tariffing their exports.

[nixon_why69]

Also, by definition, if dollars left the country then stuff came in. We literally traded bit flips in a database for tangible stuff.

[groundzeros2015]

Bit flips in a database = years of people’s labor and planning

[nixon_why69]

No, it's literally just bitflips. The supply of dollars increases by trillions a year between fractional reserve banking and, depending on the year, fed policy. We're not even printing them.

[groundzeros2015]

Indeed. And according to MMT what that does is claim economic output for the government (work resources etc), without direct taxation.

[wat10000]

An arbitrary score that's meant to represent said years, not the actual output of those years.

It's important to remember that money is not value. It's a score that's meant to represent value, but the value itself is entirely distinct.

[groundzeros2015]

People literally work their lives for that representation. It’s not the value itself but it’s a way to store and transfer certain kinds of value.

[wat10000]

It's a way to represent that value. The number does not itself store the value, nor does changing the number transfer the value.

It's true that people work hard for that representation, because we've built systems where the link between the representation and the underlying value is quite strong, but it is still just a number at the end of the day.

[groundzeros2015]

That number that you don’t think is real lets you claim actual resources now and in the future.

I think you should equally be confused about abstractions such as university credentials, or citizenship.

[smallmancontrov]

...and then whoever sold us the goods turns around and uses those dollars to bid up US assets. Next time you are bidding for a house, take some time to appreciate just how expensive those bit flips have made things.

It did make it easy to raise capital, though, which is nice.

[selectodude]

Don’t blame imports for our sclerotic country banning construction nationwide. Plenty of countries have spent billions on new construction in the US and gotten smoked. The buildings still stand though.

[throwaway2037]

    > Plenty of countries have spent billions on new construction in the US and gotten smoked.

I don't follow here. Can you explain and provide an example?

[nixon_why69]

The point is foreigners reinvesting those dollars into development in the US is... even more stuff in the US in exchange for bits.

Yes, it's owned by foreigners and sends cash overseas but all of the economic activity is here and if push came to shove.. they're not exporting the building.

It's not all gravy, there are issues with having global capital so deeply involved in the country, but it's better than the alternative, there's a reason Americans live so well and its not because they're all smarter or harder working.

[selectodude]

Japan in the 1990s, ME sovereign wealth funds in the late 2000s, China in the mid 2010s.

[throwaway2037]

The original post specifically wrote: "new construction".

As I understand, those investment waves were mostly buying existing assets, not building new ones. From your examples, do you have examples of significant new construction? I do not.

When I think of foreign investment to build things in the US, I mostly think about German/Korean/Japanese auto manufs and Korean/Taiwanese semiconductor manufs. Most people don't understand the massive investment that German/Korean/Japanese auto manufs have made into the US to build and operate plants in the last 30+ years. (This also includes local R&D centers.) It is huge, maybe more that the domestic manufs in aggregate. The same can be said for Korean/Taiwanese semiconductor manufs in the 2020s: The numbers are simply staggering and far exceed domestic producers.

[disgruntledphd2]

> uses those dollars to bid up US assets.

Predominantly US financial assets, like Treasuries and company equity.

[smallmancontrov]

Show me a bay area house that wasn't funded in substantial part by company equity.

[smallmancontrov]

> We literally can't lose

Who is "we"? Trade deficit dollars are recycled into assets, which compete with exports in the balance of payments. If you have a big house and fat brokerage account, you win big. If you have a job building shit, you lose big. If you have a job building tradeable shit and a low net worth, may god have mercy on your soul.

If you want the full economist version, "Trade Wars are Class Wars" by Klein and Pettis

[AbrahamParangi]

We is the country. Yeah, not everyone gets to win the same amount at the same time. The alternative is just maga communism (pathetic).

[smallmancontrov]

"We" is 10% of the country at best. Asset ownership is concentrated.

No, the alternative is Alexander Hamilton protectionism, which built the country into an industrial superpower that eclipsed the very shadow it was put in place to escape.

What's done is done, though. We successfully sold the industrial base of the USA to the Communist Party of China in order to pump our brokerage accounts. Winning?