The U.S. trade deficit reached a record level in September. Sixty-six billion dollars in deficit.
A lot of people don’t seem to know what that means, and rightly, they don’t care. But, it’s helpful to know. Knowing things is the first step to, you know, being smart.
A trade deficit means that we, as a nation, imported more goods from other countries than we exported to other countries. We don’t make enough of anything here to self-sustain. So, we buy things from other countries. Unfortunately, we don’t even make enough here to sell back to the world to pay for the things we buy.
Where do we buy these things, anyway? We get them from all over. China, mostly. Canada, too. Really, anywhere but here. And we don’t have much to offer back to the rest of the world.
But does that matter?
My take is, right now, it seems to. But we live in a global economy. The economic boundaries between countries are breaking down. Money is becoming less real and more conceptual. Vast sums of currency are transferred around the world instantly, with no physical materials ever being moved.
Unfortunately, it doesn’t just work like that. Our country, and its’ citizens, need to stay relevant to the rest of the world. If we aren’t producing anything of value to the world’s inhabitants, they won’t continue to allow us to exist in this economy. The United States is propping itself up on credit and service industries. Much of our profitable industry is focused inward. Fast food, domestic product manufacturing, real estate sales, construction, inter-state tourism. Money changes hands between service workers in exchange for the services they each provide to the other. That is a very fragile system.
Our economy has typically thrived during periods of armed conflict. The United States is well known for its’ capacity to make war, and to make war profitable. Let’s just hope it doesn’t come to that again.
