Thursday, October 13, 2005

Soaring Trade Deficit

The U.S. trade deficit hit its third highest level of all time to $59 billion for the month of August. Our deficit with China was about $18.5 billion for the month. This means that we imported $18.5 billion more from China than we exported to China. With oil prices still very high don't expect a change in this deficit any time soon.

When you consider the fact that China also holds abot $250 billion of the U.S. national debt and continues to let us borrow more from them the problem becomes even more clear. We are basically borrowing money from China so that we can buy more of their stuff. That is not good economics over the long term.

2 comments:

Anonymous said...

Good thing I like to eat Orange Chicken.

Rob said...

Wolfie, you always know how to get a smile out of me.