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April 9, 2014

Jonathan Tobin: Why Did Kerry Lie About Israeli Blame?

Samuel G. Freedman: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Jessica Ivins: A resolution 70 years later for a father's unsettling legacy of ashes from Dachau

Kim Giles: Asking for help is not weakness

Kathy Kristof and Barbara Hoch Marcus: 7 Great Growth Israeli Stocks

Matthew Mientka: How Beans, Peas, And Chickpeas Cleanse Bad Cholesterol and Lowers Risk of Heart Disease

Sabrina Bachai: 5 At-Home Treatments For Headaches

The Kosher Gourmet by Daniel Neman Have yourself a matzo ball: The secrets bubby never told you and recipes she could have never imagined

April 8, 2014

Lori Nawyn: At Your Wit's End and Back: Finding Peace

Susan B. Garland and Rachel L. Sheedy: Strategies Married Couples Can Use to Boost Benefits

David Muhlbaum: Smart Tax Deductions Non-Itemizers Can Claim

Jill Weisenberger, M.S., R.D.N., C.D.E : Before You Lose Your Mental Edge

Dana Dovey: Coffee Drinkers Rejoice! Your Cup Of Joe Can Prevent Death From Liver Disease

Chris Weller: Electric 'Thinking Cap' Puts Your Brain Power Into High Gear

The Kosher Gourmet by Marlene Parrish A gift of hazelnuts keeps giving --- for a variety of nutty recipes: Entree, side, soup, dessert

April 4, 2014

Rabbi David Gutterman: The Word for Nothing Means Everything

Charles Krauthammer: Kerry's folly, Chapter 3

Amy Peterson: A life of love: How to build lasting relationships with your children

John Ericson: Older Women: Save Your Heart, Prevent Stroke Don't Drink Diet

John Ericson: Why 50 million Americans will still have spring allergies after taking meds

Cameron Huddleston: Best and Worst Buys of April 2014

Stacy Rapacon: Great Mutual Funds for Young Investors

Sarah Boesveld: Teacher keeps promise to mail thousands of former students letters written by their past selves

The Kosher Gourmet by Sharon Thompson Anyone can make a salad, you say. But can they make a great salad? (SECRETS, TESTED TECHNIQUES + 4 RECIPES, INCLUDING DRESSINGS)

April 2, 2014

Paul Greenberg: Death and joy in the spring

Dan Barry: Should South Carolina Jews be forced to maintain this chimney built by Germans serving the Nazis?

Mayra Bitsko: Save me! An alien took over my child's personality

Frank Clayton: Get happy: 20 scientifically proven happiness activities

Susan Scutti: It's Genetic! Obesity and the 'Carb Breakdown' Gene

Lecia Bushak: Why Hand Sanitizer May Actually Harm Your Health

Stacy Rapacon: Great Funds You Can Own for $500 or Less

Cameron Huddleston: 7 Ways to Save on Home Decor

The Kosher Gourmet by Steve Petusevsky Exploring ingredients as edible-stuffed containers (TWO RECIPES + TIPS & TECHINQUES)

Jewish World Review Nov. 10, 2010 / 2 Kislev, 5771

Worry Over Trade Deficits

By Walter Williams




http://www.JewishWorldReview.com | At the recent Group of 20 (G 20) meeting, U.S. Treasury Secretary Timothy F. Geithner called upon the largest industrialized economies to get their current account balance — whether a surplus or a deficit — below 4 percent of their gross domestic product by 2015. Four countries have current account surpluses exceeding 4 percent: Saudi Arabia (6.7 percent), Germany (6.1 percent), China (4.7 percent) and Russia (4.7 percent.) Countries like Russia and Saudi Arabia that are "structurally large exporters of raw materials" would be exempt from the 4 percent limit, so the pressure of the U.S. proposal falls mainly on China and Germany. Our annual trade deficit of $500 billion is less than 4 percent of our GDP.

Acting on behalf of various interest groups, politicians fret over trade deficits but is it something that ordinary Americans ought to worry about? What politicians and inept people in the news media, whose duty is to inform, never bring up is that in the international trade arena, there are two accounts. One is called the current account, which consists of goods and services exchanged between Americans and foreigners. That's the account where we have a large trade deficit. Americans buy more goods and services from foreigners than they buy from us.

There's another account called the capital account. It consists of foreign direct investment in the U.S. such as the purchase or construction of machinery, buildings or even whole manufacturing plants plus foreign purchases of stocks, bonds and currencies. For example, Toyota might sell me a Lexus, manufactured in Tahara, Japan for $70,000 but not purchase any American goods such as wheat, cotton or steel. That means there is a $70,000 trade deficit with the Japanese. What will the Toyota seller do with the $70,000? It would be wonderful if Toyota and other foreign producers just treasured dollars and simply stored them. We'd be on easy street having a few Americans printing up dollars whilst the rest of the world sends us cars, computers, coffee and other goods in exchange for them.

It doesn't work out that way. In our example, instead of purchasing American goods with the $70,000, Toyota might put the money toward building a Toyota plant, as it has already done, in Huntsville, Ala., that employs nearly 800 Americans. As a result of that current account deficit of $70,000, we have a capital account surplus (net inflow of capital into the U.S.) of $70,000.

Here's my question to you: Have Americans been made worse off because of the $70,000 current account trade deficit? I'd answer no. Of course, Congress could do something to reduce the trade deficit. They could impose tariffs and quotas to restrict the number of Lexus cars being exported to the U.S. or the White House could, as was done during the Reagan administration, intimidate Japan into "voluntary export restraints." Again, would Americans be better off? By the way, there are other ways for capital inflows, or investment in the U.S., to occur. With the dollars foreigners earn selling us goods, they purchase U.S. stocks, bonds and real estate. As a people, we should be proud to be a nation in which millions of people around the world want to buy into.

What about the argument that American producers are undercut by cheap goods imported from low-wage countries like China? Whose fault is this? The answer is easy. If American consumers refused to buy goods produced in China, there would be no Chinese-made goods on store shelves. American consumers who prefer lower prices to higher prices are the true enemy of American companies and their unions whining about "free but fair trade." They should show up in front of Walmart and other sellers of foreign products and denounce American consumers who buy foreign-made products. That would be honest. The "free trade but fair trade" lobby finds it more effective to pursue their agenda by stealth — namely intimidate and bribe congressmen into enacting tariffs and quotas.

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© 2006, Creators Syndicate.

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