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Path: utzoo!watmath!watnot!watdcsu!dmcanzi
From: dmcanzi@watdcsu.UUCP (David Canzi)
Newsgroups: net.politics
Subject: screwball logic and the balance of trade
Message-ID: <1555@watdcsu.UUCP>
Date: Mon, 22-Jul-85 05:28:27 EDT
Article-I.D.: watdcsu.1555
Posted: Mon Jul 22 05:28:27 1985
Date-Received: Wed, 24-Jul-85 21:09:38 EDT
Distribution: net
Organization: U of Waterloo, Ontario
Lines: 20

Imagine a fictitious country, San Lorenzo, which has an unfavorable
trade balance.  What this means is that San Lorenzo is importing more
than it is exporting.  There are two ways to reverse this situation to
a favorable trade balance:

1) Hold exports constant, and decrease imports.  
	The result: The people of San Lorenzo are working just as
	hard as they were before, but because of the reduced imports,
	they are getting fewer goods and services for their labor.

2) Hold imports constant, and increase exports.
	The result: The people of San Lorenzo must work more in order
	to produce the extra export goods, but they get no extra goods
	and services for their extra work.

Question:  In view of this simple thought experiment, why is a situation
where your country exports more than it imports called a *favorable* trade
balance?  Who is it favoring?
-- 
David Canzi	"Adequacy -- is it enough?"