U.S. Trade Deficit Soars to All-Time High

[AP]

U.S. Trade Deficit Soars to All-Time High of $60.3 Billion in Nov., Reflecting Record Import Levels

Wednesday January 12, 10:55 am ET
By Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- America's trade deficit soared to an all-time high of $60.3 billion in November, reflecting record levels for imports of everything from oil and consumer goods to farm products, the government reported Wednesday.

The Commerce Department said the November deficit was up 7.7 percent from an imbalance of $56 billion in October, which had been the previous monthly record. The new record caught private economists by surprise. They had been forecasting a slight narrowing in the November trade gap.

"This caught a lot of us by surprise. We had been anticipating a pull back in the November deficit because of a decline in the price of oil," said Jason Schenker, an economist at Wachovia Bank in Charlotte, N.C.

http://biz.yahoo.com/ap/050112/economy_9.html

This is despite the weekest dollar in years. I guess in the drive to destroy US labor, we shipped all our factories overseas. We just don't make anything anymore.

[physioex]

1. Export the jobs in the red states.....

They want it, they can have it.

[Robert Oak]

4. here's the killer, they did, red states super poor n/t

[SunDrop23]

13. Exactly.

[physioex]

27. I hate to say this.....

But I use to care about this but not anymore. If they are soo stupid to want this, I say let em have it I am going to try and get mine.

[AP]

7. When the value of an hour of labor drops in alabama, it hurts the value

of an hour of labor in NY too.

[physioex]

28. But the people in...

AL are to stupid to realize these things.....

[Psephos]

29. Do you realize how bigoted a comment like that sounds? n/t

[physioex]

32. Youre accusing mwaahhh of being bigoted?

Look at all the intolerant Pat Robertson, Jerry Fallwell glorifying religious nuts in AL. Where did Kennedy have to break up a racist educational system? Take a look at map of the electoral college and you can see for yourself....

[AP]

34. You're no better than them. You're doing what they do.

[bvar22]

37. Here's a better map. One for non-bigots.

[Psephos]

40. Thanks, bvar22...that pic says it all. n/t

[Psephos]

39. My observation was about your comment, not you.

If you want to wear the shoes, that's your choice.

[physioex]

42. I understand....

I have just become more pessimistic and cynical after the pResidential election. No hard feelings.... :hi:

[Psephos]

49. No hard feelings at all...quite the opposite.

There's an old saying that if you scratch a cynic, you can see a hint of the idealist that lies underneath. It's not hard to see that your own idealism, although perhaps a bit tarnished in spots, still retains its essential luster. No one can take that away; the only way to lose it is if you let it go yourself.

I think we're all a bit jaded after November, but one of the best things about a community forum like DU is that it helps us remember that tactical defeats now do not prevent strategic victories later. If this country has taught me one thing, it's that we live in the land of second (and third and fourth and...) chances.

[QC]

53. If it waddles like a duck and quacks like a duck and shits everywhere

like a duck, it's a duck.

[AP]

30. Democrats in Bos-NY-DC power corridor are too stupid...

...to come up with an articulation of liberal values that can win the votes of those people, perhaps.

FDR could do it. JFK could do it. Clinton could do it.

[physioex]

31. Why would someone have to articulate what is best for you....

Don't they have BRAINS to figure that out........

[AP]

33. Republicans are making arguments to them that they believe.

We sit around and say they're stupid and don't bother trying to make a counter-argument.

Who's really the stupid person in that situation?

[physioex]

35. I hate to say this....

But there may not be ways to "reach out" to people who follow Pat Robertson and Jerry Falwell......

[bvar22]

38. Maybe... maybe not.

But it is possible and worthwhile to reach out to the people in the herd that follow the extremists.

You can try it in your home town.

[physioex]

41. I have to agree with you guys...

We have lost in this battle for "hearts and souls" and they haven't made it easy for us but we gave it our best......

[AP]

45. Mark Easley, John Warner, John Edwards and many other

Dems have succeded at that state level in recent years.

Clinton succeeded at the national level.

People who want to throw in the towel on this issue are people who don't want to win. They just don't want to run candidates who can win national elections.

[AP]

44. Lots of Dems do it at every level.

It's the occassional pres candidate who doesn't do it.

[cliss]

2. Of all the nerve.

"This caught a lot of us by surprise". What do these "experts" do all day, besides cruise the Internet? Now if they had "cruised" on into the DU, they would have seen article after article warning about the trade deficit.

It's not rocket science. In case they don't understand this, the Chinese currency the Renminbi, is tied to the dollar. When we go down, they ride down with us. They are probably the #1 reason for our deficit, and the drop of the dollar isn't helping us.

WAKE UP, GUYS.

[Spazito]

3. It is interesting there is no mention that the world may be boycotting...

US products, especially those made by corporations that donated to bush's campaign, no matter how cheap they may be due to the falling dollar. I think that is a part of the increased trade deficit albeit a small part.

[AP]

5. Boycott what? We don't make much anymore. And if they really wanted

to hurt the Bush adminsitration, they'd stop accepting our factories, because by doing so they're doing exactly what Bush wants: they're destroying the value of an hour of American labor, and they're increasing the profit margins for Bush's big business donors.

I guess the other thing they could do is start paying their own workers more money, and they could start charging the US more for what they're selling. That way they could help both US labor and their own citizens. But it's not like a lot of those factories are in countries that care about democracy.

[central scrutinizer]

11. that's why those factories are there

totalitarian states hate and fear organized labor even more than corporations. Why hire union busting lawyers, when you can rely on a dictator to use tanks and troops?

[Just Me]

26. Another facet of fascism: suppress labor power.

Of course, there's been a long-term campaign against unions which have been seriously diminished.

[Spazito]

14. Well, outside of the export of munitions by 'defense' corporations...

I don't disagree with you regarding the lack of goods being manufactured in the US. It is up to the citizens of the US to demand that outsourcing be stopped and, given the result of the last 'election', there doesn't seem to be a concern.

As to other countries offering higher wages, etc, it is all relative to the cost of living in their countries as to what a 'higher' wage should be, imo.

Canada pays it's employees a fair wage and, yet, has a trade surplus and is a democracy, go figure!

[grumpy old fart]

8. Let's see now, we're now an importing nation, China owns all our debt...

Hey buddy, can ya spare a yuan?

[NYC]

50. If you are talking about products

like Coca Cola, they are made in foreign countries, anyway. People may boycott them, but it has nothing to do with American jobs and American manufacturing.

It just means that some American corporation (which wasn't paying U.S. taxes anyway) has less profit.

If foreign countries boycott products made in the U.S. it will have a bigger impact, but how many products do we make anymore? When we need "stuff" we buy it from China.

[Robert Oak]

6. outsourcing, move manufacturing overseas

corporations incorporated in Bermuda and so on to avoid any US taxes...

suprise.

It's unsustainable and we're in big trouble.

[central scrutinizer]

9. Not LBN

I am sure I saw this exact headline last December, last November, last October, last September, last August, last July, last June, last May, last April, last March, last February, ............

[UpInArms]

10. related article:Trade gap soars to record $60.3 billion

http://cbs.marketwatch.com/news/story.asp?guid=%7B0ECE01C3%2DBFC0%2D41B7%2D9FF2%2D1227AE88BAB4%7D&siteid=mktw

WASHINGTON (CBS.MW) -- U.S. exports sank 2.3 percent in November, driving the nation's trade deficit to all-time high of $60.3 billion, the Commerce Department estimated Wednesday.

While exports fell to a five-month low of $95.6 billion, imports rose 1.3 percent to a record $155.8 billion as the bill for imported oil rose by 17.7 percent -- more than $2 billion -- to a record $14.2 billion. The November figures are adjusted for seasonal factors, but not for price changes. Read more.

The trade gap on goods and services thus increased by 7.7 percent from October's revised $56 billion and by 50.8 percent from November 2003's $40 billion.

Wall Street economists had been expecting the U.S. trade deficit to shrink to about $53.3 billion, according to a survey conducted by CBS MarketWatch. See Economic Calendar.

For the first 11 months of 2004, the trade gap totaled $561.3 billion, beating the annual record of $496.5 billion set last year with another month to go. For the year to date, imports have risen 16 percent, while exports are up 12 percent.

The trade gap has widened despite a weakening dollar, which theoretically should make U.S. goods and services more competitive from a pricing standpoint both at home and abroad.

...more...

More proof that their freakin' theory DOES NOT WORK!

[TahitiNut]

16. Well, the Bushoilini-weakend dollar sure has the world beating a path ...

... to our door, right? Not. F*cking fascist pukes! :puke:

[UpInArms]

17. I'll second that TahitiNut

F*cking fascist pukes! :puke:

[0007]

24. ....and if we were playing Faro, I'd copper that with 200 yuans

"The declining dollar cannot overcome weak demand in Europe. In addition, the greenback's value has barely budged against major Asian currencies, particularly the Chinese yuan, which is pegged firmly to the dollar."

Faro was once one of the most even gamble a person could get in a casino. A little better than the 'Don't Pass' in a crap game.

[Barkley]

12. Some of this deficit is due to Bush's tax cuts for the wealthy

Some of the extra disposable income that arose from Bush's tax cuts for upper brackets must have went to buy good and services from overseas.

[AP]

18. If you look down the list of things we're buying from abroad, I doubt lux-

ury goods rank very high.

It's probably mostly energy, textiles, steel, wood, food, etc.

[Barkley]

19. Got a link for the list of imports? - nt

[AP]

21. They're mentioned in the article.

But the article doesn't have the numbers.

If you find anything, link it here.

[Robert Oak]

22. can't find specifics

but try consumer electronics, automotive parts, now including engines,
aircraft engines, toys, textiles, even the American flyer
red wagon went to China in the last year..

basically all sorts of stuff that used to be made in the US
moved to China from 2001 to present.

They are gearing up on services big time...with the help
of our major high tech companies. Our US companies like IBM,
Microsoft HP and Intel are literally hiring US engineers to teach
Chinese engineers, set up universities and the like (FOR FREE!)
to crank out Chinese engineers.

[AP]

23. I have a friend who works for a US software co. He just went to Bangalore

for a two-year stint. They told him that he should go if he expected to move up in the company. He's setting up the operation in Bangalore that used to be conducted in the US. The US operations soon will solely be the executives who make a profit off the difference in cost of production and the price they can extract from selling their software in Europe and the US. And I'm not expecting a big software market in the US if the only people who have good jobs are a handful of executives.

But you know what? I'm starting to see that a lot of Americans make money off the swings. They must know that a Democrat is going to get elected and bail everyone out and create a middle class again, which will then be ripped off by Republicans again after 8 years of prosperity, and we'll just swing back and forth, and the people who will really make money are the CEOs who know which way the legislative wind is blowing so that they can get a jump on everyone else. And clearly the jump right now is outsourcing everything.

[muriel_volestrangler]

52. Here's an attempt at a report from a US govt site

my first attempt, but I think I got the query right.

This is for US general imports (as opposed to 'imports for consumption'). You can try your own reports at http://dataweb.usitc.gov/scripts/user_set.asp (you have to register a userid).

SITC Number 								2003 YTD 	2004 YTD 	Percent Change
YTD2003 - YTD2004
In 1,000,000 Dollars
7 MACHINERY AND TRANSPORT EQUIPMENT 					475,842 	544,610 	14.5%
8 MISCELLANEOUS MANUFACTURED ARTICLES 					201,595 	221,771 	10.0%
3 MINERAL FUELS, LUBRICANTS AND RELATED MATERIALS 			142,701 	187,465 	31.4%
6 MANUFACTURED GOODS CLASSIFIED CHIEFLY BY MATERIAL 			121,861 	155,717 	27.8%
5 CHEMICALS AND RELATED PRODUCTS, N.E.S. 				91,853 		102,680 	11.8%
9 COMMODITIES AND TRANSACTIONS NOT CLASSIFIED ELSEWHERE IN THE SITC 	46,222 		49,317 		6.7%
0 FOOD AND LIVE ANIMALS 						38,907 		42,549 		9.4%
2 CRUDE MATERIALS, INEDIBLE, EXCEPT FUELS 				18,463 		24,219 		31.2%
1 BEVERAGES AND TOBACCO 						10,983 		11,606 		5.7%
4 ANIMAL AND VEGETABLE OILS, FATS AND WAXES 				1,441 		2,127 		47.5%
Total 									1,149,869 	1,342,061 	16.7%

[TahitiNut]

25. Our best exports are intellectual 'property' ...

... such as motion pictures and software - both of which are major 'net adds' in trade. The favorable balance in software, however, is rapidly eroding.

And soybeans. (Believe it or not.)

[AP]

55. Aside: America exports its IP -- Trademarks -- to tax havens and

then licenses them back to US corporations. The US corporation pays royalties to the corporation in the tax haven, writes off the license fee as a tax deduction, and then the profit for the license isn't taxed at all.

Nice, eh?

[TahitiNut]

56. The number of shells in their shell games would be staggering.

While not in the entertainment industry, I've done a little work with IP in a multinational (semiconductor) and the tax avoidance/evasion is an obsession with these folks. Very few I've seen are quite a simple as you've aptly described, but the array of scams is awesome.

[bvar22]

43. Don't forget cheap plastic crap (consumer goods).

Basically everything at Wally-World.

MONEY SPENT AT WAL-MART KILLS
GOD'S UNBORN CHILDREN!!!

[TahitiNut]

15. Holy global corporatism, Batman! A 7.7% increase in one month?

:puke:

[Supersedeas]

54. America has been sold

[Robert Oak]

20. there goes the dollar

http://finance.yahoo.com/currency

[VegasWolf]

36. At least gay's can't get married. n/t

[AP]

46. Gays not being able to marry and sacrificing economic health for

the profit margins of already super rich corporations is all part of the same moral nexus for Republican voters.

There's not cognitive disonance for them. It's all survivial of the fittiest. If corps send manufacturing overseas and the dollar tanks and people suffer, that's OK. That's the way it should be to them.

[oecher3]

47. What Snow had to say about this...

According to NYT article : U.S. Trade Deficit Hit Highest Figure Ever in November

http://www.nytimes.com/2005/01/12/business/12cnd-trade.html?ex=1263272400&en=f3120ffbe2bcd226&ei=5089&partner=rssyahoo

...Treasury Secretary John W. Snow said in a telephone interview that the growing trade deficit was a sign of the strength of the American economy rather than a weakness. "The economy is growing, expanding, creating jobs and disposable income and that shows up in the demand for imports," he said.

Mr. Snow put the responsibility for the trading deficit firmly on the wealthy trading partners of the United States, saying they had to buy more American products and services. He said he would tell his partners in the Group of 7 industrialized nations at a coming meeting that their economies had to grow faster to help the United States out of the current trade imbalance. <...>

NOW THIS IS A FUN ARGUMENT: you d..ass partners buy more of our s..t and then our economy will feel better. Last time I check it was that those countries had problems on their own. Why would they come and help us after we treated them so nicely with our foreign policy ala W. Of course, US is known to be an export nation and thus suffers for them sluggish exports. Hhmmmm, also a new argument. Finally, the growing trade deficit is a positive sign. Okay, now this argument is almost classic Rep., remember the rising violence in Iraq is a sign it's getting better there (safer and all). If Mr. Snow thinks his one time only remark that falsely help the economy by strengthening the dollar against the euro last Friday can be repeated over and over again, then he is in for a nice wake up. The dollar is back rising, since everybody figured out the Rep. don't take deficits seriously and reducing them is almost as unlikely.

[Ilsa]

48. Lou Dobbs just said "Free Trade isn't Free!" and

that we need to get the trade deficit under control. He blamed both Bush and Clinton for Nafta.

[oecher3]

51. Free trade is free...

Well Lou might not be wrong here, however I don't know what he said about NAFTA and won't say anything to that. But free trade honestly is not free, it comes with costs and responsibilities.

Is there maybe a bit more to his argument, maybe a link to the written statement, or the like?

[phgnome]

57. Global development as a way out

I can't believe that such a huge crisis is at hand and we've turned this into a bashing thread. Pointing fingers will not help solve the problem. In fact, it will worsen the problem because it divides and diverts all the energy that can be used into resolving this issue to things that are not constructive and will be trivial points in the history books a hundred years from now.

It's not China's fault for wanting to grow and be a more developed country. It is every country's right to want a better quality of life for its citizens. It is China's right to do what's in THEIR best interest and not foreign interest -- to do what's in foreign interest is treason.

If China raises the value of the Yuan, it is a VERY bad thing for the US -- think about it. Think about who the US has borrowed very large sums of money from through World Bank. China is one of the bigger lenders. Public debt will grow out to the point where the US will be unable to even make interest payments. Then, we're screwed big time. Yes, Chinese manufactured goods will become more expensive on the global market but our public debt will grow to unmanageable proportions.

The US government has a history of going to war with its creditors to reduce public debt. Do we really want to go to war with China, with over 1.6 billion people and nuclear weapons? We think a war with Iraq is bad? What are our odds of winning a war to wipe out our debt? Will we end up spending more than the public debt itself to cancel our debt with China? How about Russia?

The truth of it is that if we go down this road, we'll continue to be a stagnant war-based economy and we'll continue to be the demonized Americans that many parts of the world already sees us as. Eventually, the we could be forming a very large alliance against us.

I don't know about you, but I don't want to go down that road.

The debt and the high dollar is not the fault of Bush, either. It's the result of development. I'm an atheist and I believe that Bush's current policy wrt Asia is heading in the right direction. I don't particularly like Bush or any other politican but our options are rather limited right now.

Forbes published an article the other day saying, "But administration officials said foreign countries are not growing fast enough to stimulate domestic demand that would help boost U.S. exports. Treasury Secretary John Snow told reporters in New York that finance officials from the world's seven wealthiest countries would focus on ways to promote global growth when they meet in London in early February." (Source: http://www.forbes.com/business/energy/feeds/ap/2005/01/12/ap1755854.html)

I don't think this is such a bad idea. Economic growth through development of other nations. We're complaining about the "cheap crap" imports through Wally Mart but that's not the US's main business in the global economy.

I took a course in International Trade and Financing last winter and I learned some interesting things: that our economy is a capital-rich economy. This means that we derive a large chunk of our GDP from the sales of capital equipment...farming equipment, machines used in the manufacturing process, etc. etc. Countries like China are labor-rich economies. They produce things like textiles and manually assembled things. These things account for a large portion of China's GDP because they don't require the use of heavy machinery to produce. Taking away these businesses away from them would reduce our "specialization" as a capital-rich economy and if we produced these things with machines, not many jobs would be created in the US because we would use machines to produce these things, it would burn more oil, cost more, and the net gain in jobs will be minimal.

What we COULD do to create jobs is to export manufacturing equipment to developing countries and export engineers to provide "free training" so people will know how to use and repair the equipment that we sell them. Think about how much machinery we could be exporting to China (as they have little means of producing this equipment now) and the impact it would have on raising our GDP. The rate of literacy is growing in China and, as a result, the population will fall significantly in the next few generations as a result of development. They will need the manufacturing equipment just to make up for the labor gap to support the population. This is a huge market. A lot of businesses are getting in on it and, perhaps, the US economy should get in on it instead of resisting change.

The other thing we could do to reduce some of the public debt and trade deficit gap is to export space programs to countries that are developed enough to run one. I've read a number of articles lately that say that we have found water on Mars. Why not start developing more human space exploration technology? Why do we need to hoard it? Why are we bickering over the who produces the cheap stuff when we could be focusing our everyone's efforts on building another world altogether? Maybe we'll learn more about how our own ecosystem works. Maybe in the journey to another world, we can find ways to fix the ecological wrongs in our own world.

I don't believe it's out of our reach. I don't believe the deficit problem has to have a bad outcome. I don't believe that we have to be in conflict with anyone else to get out of this. Let's make the effort and pitch space programs to developing countries. Let's use our propaganda networks to show the world how cool space exploration is. I promise it won't be hard to show them. Let's not be developed at the expense of other nations. Let's help them to be as developed as we are and to help all of us get out there.

We are already a very developed economy. Perhaps further growth at this point will only hinder us and burden future generations of Americans with more debt and war. Let's help other parts of the world catch up in development and use this as an opportunity to pay back some of our public debt and even up the trade account deficits.

[ixion]

58. weak dollar + increased trade defecit =

fewer people who want to do business with the mafia thugs that are US multinationals.