Differences

This shows you the differences between two versions of the page.

--- deficit [2026/09/18 10:46] – ultracomfy
+++ deficit [2026/09/18 11:09] (current) – ultracomfy
@@ Line 19: / Line 19: @@
 To be very clear, to me this isn't about Trump. I don't care about Trump. He was democratically elected and delivers the kind of politics all of us roughly expected him to deliver, regardless of what that means to either you, me, or the other side of the political spectrum. No, this one is different because I have general knowledge of what he is talking about, and in addition I also have words this time that I think would constitute a nice and clean response to that social media post.
+====== Spending Deficit ======
+That answer, specifically, is: Being out of money and being bankrupt are not the same. Similarly, deficit and loss are not the same. All of us should know that many people store some or much of their value in assets. For these people, running out of cash on hand doesn't mean a lot and certainly doesn't mean that they're bankrupt now. If you are capable of making this distinction, then you are capable of distinguishing between loss and deficit, too.
+So, typically the term deficit is used in economy to describe government spending. When a government spends more money than it makes through, for example, taxes, it is running at a deficit. Spending more than you have accumulates to debt. Accumulating //debt// and operating at a //loss// are not the same. Because even if your government has a spending deficit, they are still getting things for their spending. For example, the United States routinely imports semiconductors and microchips, the spending for which is added to the national debt. But, critically, the United States //is actually getting// those semiconductors and microchips, so the money wasn't just //lost//. This spending adds to the spending deficit, but it is not the same as just losing money.
+This is the reason why deficit is called deficit, because the calculation of deficit is a calculation of subtraction. Not all subtraction calculations equal loss. Real losses happen in investments (which are not the same as spending), when the revenue does not match or exceed the original investment. Movies can run at a loss. Companies might sell products at a loss, the United States might export goods at a loss if it sells at a price lower than what it cost the United States to produce the goods. There might be a discussion about whether some government spending could be considered a loss if it doesn't align with one's personal values on what the government should or should not spend money on in the first place. But that's not the kind of conversation that I want to have, and it's not the conversation Trump is having, because he talks about the //trade deficit//.
+====== Trade Deficit ======