Here’s a letter to FT.com:
Reporting on the fall in the US trade deficit, your writers cheer that “The new data are especially encouraging because they show stronger overseas demand for US industrial goods and suggest that some of the rise in imports this year may have been temporary” (“Exports shrink US trade gap ,” Dec. 10).
Let me get this straight: we Americans should find it “especially encouraging” that we’re on track to produce more for foreigners while foreigners are not on track to produce more for us? Is that correct?
If it’s really true that America’s economy is strengthened whenever the ratio of our exports to our imports rises, then we should trade, not with other countries, but with the open ocean. Let’s daily load hundreds of cargo ships with American-made goods; pilot these ships out to sea; and then dump all the cargo into the open ocean. Lots of exports; zero imports; no trade deficit.
Sounds like a formula for prosperity, eh?!
Donald J. Boudreaux
UPDATE: A couple of folks wrote to remind me that the dump-the-cargo-at-sea analogy originated with Frederic Bastiat . That’s exactly true. I’d forgotten that that greatest of all economic popularizers used this reductio. My apologies to Bastiat’s ghost for my forgetting that I got this example from him.