Originally Posted by Traditionalist
Bombardier could have made those train carriages but instead we imported them from Germany. It is imports that cause the damage to the British economy.
An export led recovery is something that politicians say from time to time. But I am interested in making things here in Britain, and not importing them unnecessarily.
We are importing 4 ships from South Korea when we could have made them here in Britain.
We could have printed the Olympic tickets but instead we are importing them from the USA.
We have just had Quantitative Easing of 325 billion pounds. If you use QE, then everything made in Britain is free to the government, and the only cost is the cost of printing the money.
If you run a trade deficit it is usual to take steps to correct that deficit.
1/ Devalue the currency to make exports cheaper, and imports more expensive.
2/ Raise interest rates to reduce demand in the economy
3/ Deflate the economy to reduce demand
4/ Raise taxes to reduce demand
5/ Cut government spending to reduce demand
The action taken to reduce the trade deficit will cause unemployment to rise. Therefore one would expect countries with huge trade deficits to have higher unemployment.
The numbers of people in the UK born abroad is about 7-8% of the population, and is nowhere near 11million people. Your also assuming that all those people spend money abroad.
Originally Posted by flamingreen
£1billion or £2billion is 2/1000's of our GDP, or more precisely 0.2%, if you take into account inflation, apply those figures to 1994GDP it still only accounts for less than 1% of our GDP.
My comment about xbox and PS was a sarcy comment, because anyone who knows anything about our trade deficit, knows the bulk of the money go's to Imported goods (Oil, Cars, and electrical goods) which almost every briton owns.
Every brit own £1000's of imported goods, so a bengali bying a bag of rice, isnt a problem to the trade deficit, when 70 brits are buying BMw's or Audi, and Xbox's, and Sony TV's,
How many of the 20million phones in the UK were built in the UK?
This is why we have atrade deficit.
You are right (or should i say Keynes), there will be a correlation, but i dont think that correlation would exist with immigrants and trade deficits. If an economy is losing money abroad, naturally there will be a shortage of money if it continues, the fake foreign exchange systems and inflation (which is mostly artificial) cover up and hide how much money we lose in real terms.
Originally Posted by SDP
Germany has as many foreigners as us, and they have a huge surplus. Countries like italy and greece, who dnt have many immigrants (relatively), have huge deficits...wheres the immigrant link? USA has always had huge immigrant populations, and has been for the most part a successfull economy.
The difference is they built and maintained huge industries, our government is not interesting in maintaining our local industries. They were built, now they've collapsed, trains, ships, like you pointed out. This country was once the pioneer of these,
In 2010, there were 7.0 million foreign-born residents in the UK, corresponding to 11.3% of the total population. Of these, 4.76 million (7.7%) were born outside the EU and 2.24 million (3.6%) were born in another EU Member State
Originally Posted by alemcodon
I agree with the basic point that imports, particularly of consumer goods, lead to unemployment in the UK.
The British consumer is of course responsible for choosing foreign goods over British goods. That is why so much of British industry has disappeared over the last 50 years. Japan, Germany, China, India etc all supplying goods that once were supplied by UK manufacturers.
Consumers demand ever cheaper prices and aren't bothered about the long term consequences of buying imported goods. If consumers had been more loyal to British companies, there would not have been the attraction to import goods from abroad.
We ALL reep what we ALL sow.
SDP: If you add the two together you don't invariably have a trade deficit. Indeed from 1816-1820 until 1930-1934 we had a net balance, despite deficits on the visible trade account. In the post war world invisible trade continued to be good, but the weakness was the visible trade account.
Originally Posted by SDP
Our visble trade is distorted by the arms trade which is heavily subsidised by the government's Export Credits Guarantee Dept. We are, as I have told you previously, the worlds second largest arms supplier. There may be political advantages to the arms trade, although that is doubtful, but the economic benefits are few. Should BAE leave Britain, as they are proposing, they won't be providers of labour, and the underwriting of their business by the ECGD should then cease.
Originally Posted by alemcodon
Can we agree on this point that immigration is not relevant to this thread.
Originally Posted by CB100
Moderate trade unions push for decent wages and working conditions. I dont think that anyone would disapprove of the actions of moderate trade unions.
The only people to disapprove of moderate trade unons are the consumers. Consumers go for the cheapest price. Consumers want goods that are built with slave labour.
There is a paradox here. The British voters want good wages and conditions for all workers. But then British voters demand imports built with slave labour.
The British voters then reject British made goods as too expensive.
It seems to me that we should either buy British goods even it they are more expensive.
Or pay slave labour wages to British workers in order to compete with imports.
You cannot have your cake and eat it.
Originally Posted by Geoffrey Collier
The figures that I am reading are the statistics printed in the latest copy of the economist. And from those statistics there seems to be a very clear correlation between unemployment and trade deficits.
I cannot comment on what happened in the thirties as I dont think comparable statistics are available. Also we now live in under a system of globalisation where imports are much more readily available.
Keynes predicted that huge trade deficits would lead to high unemployment, and he has been prove right. Greece and Spain are perfect examples of what huge trade deficits can do to an economy.
Cheap imports have taken jobs way from British workers and this has caused high unemployment in Britain.
Last edited by SDP; 04-03-2012 at 08:58 AM.