You probably haven't heard, but -- surprise! Our already astoundingly large trade deficit just hit a new record! There's a very good reason why you probably haven't read or heard about it in the news.
Dean Baker writes:
"Most people didn't see this headline, because the deficit that just soared to a new record was the trade deficit, not the budget deficit. The newly released trade data for July showed the deficit running at an annual rate of almost $820 billion, more than 6 percent of GDP. This is more than three times the size of the $260 billion dollar budget deficit now projected for 2006.Read more.
Economic and business reporters, and their editors, have a hard time understanding the trade deficit, and therefore they largely ignore it. Most of the reporting on July's trade deficit was buried in the business pages where few people would notice it.
This is too bad, because the long-run impact of a trade deficit is pretty much the same as the long-run impact of a budget deficit: lower living standards in the future.
[...]
The other reason that the trade deficit draws less attention than the budget deficit is that there is a strong class bias to the short-term gains and pain. In the short-term, the main beneficiaries are the people who work in occupations that are largely protected from international competition, like doctors, lawyers, accountants, and economists. The people who are hurt by the high dollar policy are the people whom US trade policy has subjected to international competition, most importantly manufacturing workers.
Because the short-term winners have much more political power, and own the newspapers and write the news stories, we don't hear much about the trade deficit. So, until we get a better press corps, if you want the news that will really impact your life, you will have to hunt for it."
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