Information about the Economy,
specifically the Trade Deficit 

There is much clamor about "improved" trade balance figures for September (see: Commerce Department Press Release below) as compared with August. While it is true that the trade deficit was "smaller" in September than for August we hardly find the reason for celebration.

Lets start by listing just some plain and simple numbers which are supposed to be facts:

Now we would be the first to agree that a trade deficit of $53.5 billion dollars is worse than a trade deficit of $51.6 billion dollars. But folks trade deficits in excess of $600 billion dollars a year or for that matter even $500 billion dollars a year are just plain wrong and nothing to celebrate. More important is the following:

In September, the goods and services deficit was up $10.3 billion from September 2003.

I can understand why the elected and appointed officials try to put the best face possible on this pig, but that is just what it is. Of course they do, this state of affairs has been brought to us by a two party system where special interests have an unholy influence.

Lets look at a few features of these numbers, the export total (our goods and services shipped outside our country) now exclude, virtually all: TV's, cell phones and textiles for example. The other side of the equation imports - now include, virtually all: TV's, cell phones and textiles. These are just a few of the items and industries that have left our country and the people are increasingly being presented one choice: buy an import.

We are told that this is "good" for our country and us.

Across our land there are empty factories where these items used to be made, but thanks largely in part to NAFTA, GATA and ATA these factories are now located in other countries. American citizens who used to make these products no longer work in these empty factories. We are told this is "good" for our country and us.

Not all of the trade deficit is actual goods, services (ie. labor) is also counted in the computations.

Every month additional companies and government agencies are "out sourcing" American jobs to foreign lands. Predominately India and Mexico but Red China is looming on the horizon. Once again there are an increasing number of empty facilities for call centers, IT (Information Technology) development centers and now banking back end centers that are empty, as their functions are now performed in other countries. We are also told that this is "good" for our country and for us. But the Americans who used to work in these empty facilities no longer work there.

Politicians are quick to point out how they are helping you as this generates cheap imports, but this is even a road with many dead end forks. Take a look at what the high level of trade deficits have done to the value of the US currency (federal reserve notes, the so called dollar).

The chart on the left shows the dollar/euro exchange rate. The dollar is sinking, the euro is rising - which ever way you want to look at it. But either way it presents a problem for the American consumer or at least the ones whose jobs have not been sacrificed to foreign plants, centers and other facilities.

It means that the imported products now cost more. As the dollar decreases in relationship to foreign currencies, the dollar cost of imports rises. But for products where all or virtually all of the production has moved out of the country - you have no choice but to pay the higher price.

We are told that this is "good" for our country and for us.

But how can this be good for us?

Some will say that comparing the dollar vs. the euro is not a good comparison since it is a new currency. OK - fair enough. On the right you will see a similar comparison chart with multiple other currencies. It is not isolated to the euro - the fact is plain and simple - the dollar is sinking in relationship to other currencies

We are told that all of this is "good" for our country and for us.

But at some point it behooves us to question the integrity of those who tell us that this is "good" for us. It should be obvious that these trends can not continue indefinitely. Lets get real - if a $600 Billion dollar a year trade deficit is "good" for us why not just give everybody a government style credit card and let them purchase anything they want? We could easily jump the $600 Billion dollar deficit a year up to 2 or 3 Trillion dollars or even more.

If moving factories to other countries is "good" for us why not close all of them and move all manufacturing to other countries. Then we would not have to work, we could just buy everything from them!

And if "out sourcing" is so "good" for us why not just close every call center,  IT development center and back end banking center and move them to Mexico, India and Red China?

Of course that is absurd!

So is doing it over a period of years! The fact is that the trade deficits are out of control and are only "good" for an elite portion of our country. They are not "good" for our country, for our citizens and are certainly a future burden for our grandchildren. The trade deficits are the symptoms of failed government policies and WILL CONTINUE - until you - the American citizen - stop them.

But who is to blame?

Well go look in a mirror. We elect the officials who have set these policies. After setting the policies they appoint the officials who then implement them. We have just elected a President who espouses and supports continuing these trends.

And he was the best of the two!

As long as you - the American citizens allow your choices to be limited to those who will only continue these trends - you are supporting the selling of America!

Talk about throwing your vote away, how about considering whether or not you are throwing your grandchildren's future away!

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