Despite being the #1 GDP, America has an unbelievably huge trade deficit, unlike Germany and China which have substantial surpluses. This is because American GDP is massively inflated by unproductive/destructive sectors like FIRE and military. For example, how does "imputed rent" have anything to do with economic productivity?
Also, every legitimate economist states that measuring trade policy by the size of the goods deficit is probably not a passing grade in a basic economics class. Do you have any clue what you’re talking about?
“Deficit” in the term “trade deficit” is not analogous to a deficit in personal or business finance. Trade deficits are always offset by capital inflows. A trade deficit with a financial account surplus does not necessarily mean that the U.S. is over-consuming in the present and under-investing for the future. When a trade deficit’s offsetting inflow of foreign capital goes toward government debt, it increases U.S. productivity by freeing capital for private investment.
A country like the U.S. runs an annual trade deficit with a partner country when Americans buy more goods and services from the partner than they sell to it. As a result, money flows out of the U.S. to the country, which sounds bad.
But that’s not the end of the story. Those foreigners with the trade surplus – let’s say in China – now have extra saving that needs to be put to work. A lack of productive investment opportunities at home means they look to other countries – like the U.S. – to profitably use their money.
In other words, money flowing out to pay for imports flows back in to help pay for productive investment in new capital.
The neoclassical/neoliberal economists deemed "legitimate" in USA over the past 50 years are worse than useless. The Summerses and Krugmans helped architect, or at least apologize for, the ongoing American Nightmare. This is the problem!
> In other words, money flowing out to pay for imports flows back in to help pay for productive investment in new capital.
What is one example of "productive investment", emphasis on productive (i.e. not just FIRE speculation/rent-seeking), that the Chinese are making in America, and at what scale?
Good luck, friend.