The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that total August exports of $177.6 billion and imports of $223.2 billion resulted in a goods and services deficit of $45.6 billion, virtually unchanged from July, revised. August exports were $0.1 billion less than July exports of $177.7 billion. August imports were $0.1 billion less than July imports of $223.3 billion.
We are constantly told how “free trade” is good for America, and how it boosts our exports (and thus helps GDP – and employment.)
The truth is something else entirely. Indeed, at this point one can no longer claim this is a “mistake”; it’s an intentional fraud that is pushed by multinational corporations and the politicians in their pockets. How can one realistically argue with this chart?
You might as well print that gap in red, for the blood of our workers (and monetary balance.) Or maybe yellow is accurate (you pick the pejorative that fits your particular worldview.)
When all is said and done this sort of utter crap requires the explicit “support” of the monetary authority (read: Bernanke) to be sustained. Trade deficits cannot be sustained otherwise, as the shift of capital causes a change in the relative value of currencies (in a floating fiat currency regime) that cuts off the ability to sustain the imbalance.
So what has The Fed and Congress done? Conspired to create credit to replace capital in the economy to the tune of nearly a half-trillion annually!
This in turn appears to make these trade deficits sustainable. But all credit comes with interest due, and there is no such thing as a free lunch in this regard. All we do is temporarily delay and compound the negative effects, shifting them to the nation’s citizens.
Inflation-adjusted (that is, looking at purchasing power) wages have declined in the last decade… there’s your consequences!
“Free trade” is misnamed – when you hear it, repeat back at the speaker “free financial rapes”, because that’s exactly what these policies are.