In September, the US imported $66 billion more than it
exported. If things continue the way they have been going in
the first nine months of the year — and there is every
expectation that they will — then the US will import a
total of $706 billion more than it exports. It will almost
certainly break the record that was set last year: $617
billion. Since the US economy is $12.5 trillion, this is less
than six percent of the total. But it is still a lot of
money.
Economists debate vigorously whether this is bad, or how bad
it is. Some say that since America is the dominant country it
can get away with buying more than it sells. Some argue that
the world is fundamentally different and now trade deficits
— and budget deficits — do not matter. As long as
the US is an attractive place to invest, and in any case more
attractive than anywhere else, people and governments will
continue to send their investment money to finance the
deficits.
Others argue that America's dominant position allows it to
get away with things for much longer than anyplace else, but
eventually things will have to balance out. They cannot argue
that it has not been going on successfully, but they do argue
that eventually something will happen to force the debt to be
repaid in one way or another. The most likely way that it
will be repaid is through inflation, meaning that the value
of the dollar will fall. It fell almost 40 percent from its
highest point reached four years ago, but it has since gained
back more than 10 percent of the fall. However, if it is to
correct the obvious trade imbalance, it will have to fall
quite a bit more.
However, the only sides that seem to be considered are the
economic sides. It seems to us that it is also important to
consider the morality of the issue.
As big and as vigorous as it is, the United States is not
pulling its weight. It is living off of others' work.
This does not apply to each and every individual, but on the
whole the US is consuming more than it produces. Experience
has shown that this can probably go on a lot longer than most
people think it can, but it cannot go on indefinitely.
The problem is compounded by the fact that the US government
itself is spending more than it takes in. At around $400
billion a year, the US government budget deficit is about 3.5
percent of its GDP. This is not expected to go down over the
next decade.
When the US lawmakers pass new laws, they do not seem to be
concerned about this. Recently the US Congress passed a law
called the Transportation Act. Its total expected cost is
$286 billion. This is more than $30 billion more than was
originally proposed. The reason for this is that it included
6,371 special projects that were put in by members of
Congress. A group called Citizens Against Government Waste
estimated that almost 14,000 programs were passed this year
that are so-called "pork barrel" programs since they address
the special interests of individual members of Congress.
We do not presume to give advice on the economics of the
matter. Economists themselves are divided over whether the
economics are the same as they always have been and this
behavior will eventually lead to an economic bust, possibly
only hitting the next generation, or if things have changed
fundamentally and this situation is sustainable.
We know, however, that morality has not changed. What was
morally wrong yesterday is morally wrong today and will be
morally wrong tomorrow.
Trade deficits, budget deficits and uncontrolled spending are
morally unhealthy and they should be stopped.
