[Steve_American]

I listened to a 2015 podcast by the MMTer, Warren Mosler.
In it he says that exports are a net loss to a nation making them. He points out that when a nation loses a war it may be forced to export stuff (for free) to the winner. He says that the increase in *real* wealth of a nation in time period X equals the total stuff it makes and keeps plus the stuff it buys from abroad and keeps, minus the stuff it makes and sells abroad.
. . I think he is being a little simplistic there because he specified real wealth. 1] The exporting nation is getting paid and this does or should increase its GDP. It is not giving the stuff away for free like the war example. 2] Exports do provide jobs for the workers of the exporting nation.
. . OTOH, he didn't say but I will, that with MMT those jobs can be created in the nation to make stuff that is sold to the people of the nation. They can be created because the Gov. can add dollars to the economy by deficit spending, cutting taxes, or just spending them into the economy like Lincoln did. These added dollars will always let people buy more stuff that others must make, so others get more jobs to make the stuff. Dr. Mosler is saying that this is better for the nation than exporting.

https://underground.net/warren-mosler-i ... gos-radio/
.

[Negotiator]

Well yeah its a "loss" of real wealth, because money isnt real wealth, only real items are. As such its a correct statement but still highly misleading.

Exports are simple.

Either you pay for the exports with imports, or you accumulate foreign debt.

Whats the problem of foreign debt ? This debt is in foreign currency and you have no control over that foreign currency. All you can do to get more of that currency to pay for this debt is to export more than you import.

But why can the USA afford accumulating foreign debt ? Because the USA has a monopoly over the world currency. Meaning the USA can pay for its own debt simply by printing US dollar. No other country in the world can do that and thus the USA can affort to import more than it exports.

Effectively the USA pays for its foreign debt with printed paper.

However it needs to be pointed out that this is also why the USA is de facto deindustrialized.

And thats also the reason why countries that challenge the exceptional status of the US dollar, like in the past Iraq and right now Iran, get attacked by the USA.

By the way, should the USA ever lose its special status it still wouldnt have real problems with that old foreign debt. Because the foreign debt would still be in US dollar. Thus it would simply be worthless at that point.

[Steve_American]

@Negotiator,
"Exports are simple.

Either you pay for the exports with imports, or you accumulate foreign debt."

I think you got that backwards. It should be ---

Exports and imports are simple.
Either you pay for your imports with exports, or you accumulate foreign debt.

Right?

[layman]

It’s a nice balance against those who thinking exporting and a weakening currency is a magic solution. What he says is correct if you can sustain it or else in the short term.

@Negotiator rightly points out how the us sustains it’s position through the dollars special status.

Who doesn’t want poor people from other countries sweating to make you stuff on the cheap?

[SolarCross]

1] The exporting nation is getting paid and this does or should increase its GDP. It is not giving the stuff away for free like the war example. 2] Exports do provide jobs for the workers of the exporting nation.

1. Paid in what though? If it is fake money then they are being cheated plain and simple.

2. Jobs are worthless unless they return a real reward.

[Steve_American]

"Steve_American" wrote: 1] The exporting nation is getting paid and this does or should increase its GDP. It is not giving the stuff away for free like the war example. 2] Exports do provide jobs for the workers of the exporting nation.
[/quote]

1. Paid in what though? If it is fake money then they are being cheated plain and simple.

2. Jobs are worthless unless they return a real reward.

American exporters are paid in US dollars. How could even ask such a stupid question? The US sends billions more dollars out of the country every year.
The world is awash with US$, there are several trillions of them outside the US.
.

[SolarCross]

American exporters are paid in US dollars. How could even ask such a stupid question? The US sends billions more dollars out of the country every year.
The world is awash with US$, there are several trillions of them outside the US.
.

Yeah so fake money, which is my point.

[Steve_American]

Yeah so fake money, which is my point.

My, you do have strange ideas.
You do know that 99.9999999+% of the world's people would like to take, do take, or wish they had a hoard of US$.
For fake money, that is pretty good.
.

[SolarCross]

My, you do have strange ideas.
You do know that 99.9999999+% of the world's people would like to take, do take, or wish they had a hoard of US$.
For fake money, that is pretty good.
.

Sure it's popular fake money, the most popular of all the fake money. It's a little mad to hoard it though, given it still leaks value like any other fiat currency.

[Steve_American]

Sure it's popular fake money, the most popular of all the fake money. It's a little mad to hoard it though, given it still leaks value like any other fiat currency.

IIRC, gold has not gained as much value as money invested in the stock market.
IIRC, wages went up faster than the value of gold up until wages stopped growing in about 1977.

[SolarCross]

IIRC, gold has not gained as much value as money invested in the stock market.
IIRC, wages went up faster than the value of gold up until wages stopped growing in about 1977.

I sure both claims are true if you cherry pick your time frame carefully enough but what is your point?

[Steve_American]

I sure both claims are true if you cherry pick your time frame carefully enough but what is your point?

Oops, I meant since 1900 for both.
My point is that gold [= hard money] is also not a great place to protect the value of your 'money". That is, not real wealth.
See your other thread for my reply of why inflation will not be a problem for some decades to come.
. . . I know you are sure that the massive US Gov. debt is going to cause inflation [sooner or later]. The last 40 years of no inflation as the debt has grown has not dissuaded you from this notion.
.

[Negotiator]

I think you got that backwards.

Ooops.

Indeed I wasnt paying enough attention there and said it the wrong way. Of course you pay for your imports with exports, not the other way around. Rest of my posting is still correct though. Yes you lose real wealth if you export, but you want to lose that real wealth because otherwise you collect debt. Which has to be paid by exporting real wealth at a later point. At that time with interest, though. Or you'll end up entering bankruptcy at some point.

Yeah so fake money, which is my point.

Why, yes, but its not more fake than any other currency.

All money is fake. Its a metavalue. Created to manage real values. Its created for practical purposes, but in itself its actually completely worthless.

Monkeys for example also trade between each other, by the principle give me that banana you have there for the nuts I have. They cannot understand the abstraction of money so they cannot sell one ape their nuts in order to buy the banana from another ape. They are steeply limited in what trades they actually can do.

So thats why money is needed, it allows complex trade. People have become so used to it that they see money as a value, and say stuff like "if only everyone had more money" (which would then lead to inflation which would devalue the money, because theres too much money for too few real goods). It really isnt though. Money in itself is completely worthless.

The special status of the US dollar is because its effectively the world currency, not because its "fake".

You do know that 99.9999999+% of the world's people would like to take, do take, or wish they had a hoard of US$.

Not really. Most people dont care. Its only those who trade internationally who need US dollar, and even those usually let the banks do the silent trade between their local currency and US dollar.