Cumulative U.S. Trade Deficit Surpasses $10 Trillion

Today, September 15th, 2010, America’s economy has reached a very sad milestone.  Our cumulative trade deficit, since our last trade surplus in 1975, expressed in current dollars, has now eclipsed $10 trillion.

America experienced its last surplus of trade in 1975. Since then, through July, the most recent month for which trade data has been released by the U.S. Bureau of Economic Analysis, when adjusted for inflation using the Consumer Price Index published by the Bureau of Labor Statistics, the cumulative trade deficit was $9.93 trillion. Assuming a continuing monthly trade deficit of $45 billion (the current 3-month moving average), it is estimated that the trade deficit has now reached $10 trillion as of September 15th.

The U.S. is on track for its 35th consecutive annual trade deficit in 2010 since its last trade surplus in 1975. The U.S. trade deficit of $759 billion set a record in 2006. With the onset of the global recession in 2007, it fell steadily to $375 billion in 2009, but is expected to rise again to over $500 billion in 2010.  Almost half of all Americans alive today have never known an America with a trade surplus.

Through July, 2010, America’s largest trade deficit is with China, at $145.3 billion. The trade deficit with Mexico is second at $38.4 billion. The trade deficit with Japan is third at $31.6 billion. The trade deficit with Germany is fourth at $18.7 billion.

America is $10 trillion poorer today as a result of bone-headed trade policy based on failed 18th century economic theories.  That’s $32,250 for every man, woman and child in America – almost $130,000 for every family of four.  It’s enough money to solve virtually every financial challenge facing America, including putting the social security fund back on sound footing.  It’s enough money to nearly wipe out our national debt.

In 1947, when America signed the Global Agreement on Tariffs and Trade, it was so easy for our leaders to come together and hold hands with the rest of the world, like the old “I’d like to teach the world to sing in perfect harmony” Coke commercial.  Now we see what their sappy good intentions and simple-minded economists have wrought – an America in serious decline and a global economy collapsed by enormous trade imbalances.  Nowhere is a leader to be found with the courage to undo what our 1947 predecessors stumbled into so blindly.  If our founding fathers ever thought it conceivable that our trade policy would be abandoned to a global trade organization bent on pillaging America, they would surely have included in the constitution a requirement for a balance of trade that also made it illegal to join such a global organization.

Never has America been so threatened by neglect of its economy and by a complete failure of leadership.  Never has it so badly needed an amendment to its constitution to mandate the inclusion of common sense in its trade policy.  (See http://petemurphy.wordpress.com/more-good-stuff/28th-amendment-to-the-constitution-of-the-united-states/ )

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8 Responses to Cumulative U.S. Trade Deficit Surpasses $10 Trillion

  1. wayne fazio says:

    http://petemurphy.wordpress.com/2008/01/ Nothing happens by accident. World government, maybe.

  2. Peteopolis says:

    Since you endorse the existence of global bonds and equity, I’m not sure why you fail to understand the typical politician response: “America is not competitive”. What do they mean by ‘America’? Ans: Employees. And where do employees fall? Ans: under the spreadsheet column called COSTS. Since capital has to be sourced via PRIVATE and not sovereign means, why do you continue to wail on about trade policies when they are irrelevant. What is relevant is debt monetary dynamics and how they change over time. Your “solutions” are completely impossible in this monetary system.

    • Pete Murphy says:

      What exactly are “debt monetary dynamics?”

      • Peteopolis says:

        Triple-A securities (aka worthless crap) polluting the Federal Reserve’s portfolio. How bad. Noone can say for sure and the Fed govenor appointed by the so-called government isn’t keen on being audited. Because of this deliberate madness to expose itself, the entire nation is at risk of ruin. To believe these marxist criminals (Obama and his “Economic Team”) have any intention of fixing trade is beyond naive.

      • Pete Murphy says:

        Randy, I’ve tolerated your silly rants long enough. Your conspiracy theories and ridiculous comments like “marxist criminals” are boring and add nothing to the debate here. I’m sure you’ll entertain yourself with obtaining new identities and wasting your time writing more long, boring diatribes. It’ll all be in vain because I’ll have just as much fun blowing them all away.

  3. Peteopolis says:

    Those exporters, like Japan and Germany are sending jobs elsewhere too. They are building production facilities in other countries, and I suspect some of their notable corporations employ more people in other nations than their own. Manufacturing isn’t some kind of magic powder for organic job growth. Its all formulaic and driven by the real money holders, bonds, equities, etc. A Global Securitization Engine does not require high paying jobs to prosper. In fact, employees are NOTHING BUT COSTS to these thugs. To them America is built out (debt saturation) and is too costly. Therefore, we are left for dead because we have no control over debt creation.

    • Pete Murphy says:

      They may send some jobs elsewhere, but the net flow of jobs is into Germany and Japan (and China and South Korea, etc., etc.)

      Randy, you still don’t seem to comprehend the role of population density in driving these imbalances. All this gibberish about “Global Securitization Engines” and “debt monetary dynamics” is completely irrelevant. The problem is that overpopulated nations are glutted with labor and relatively devoid of demand, making global trade imbalances automatic and irreversible without the use of tariffs to counteract the effect.

  4. ClydeB says:

    Is this another case where “if you can’t convince them with rhtoric, then baffle them with BS”?

    Certainly employees represent cost to manufacturers. It is equally true that their wages drive the economic engine where they live. USA based employees trumps foreign employees, EVERYTIME!!

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