This graph, which appears in the latest issue of Scott Lincicome’s “Capitolism,” is worth pondering.
DBx: It is almost certainly the case that America’s on-going trade deficits investment surpluses – a.k.a. capital-account surpluses – contribute to this impressive growth in the productivity of the U.S. economy. Just as you in Ohio or Louisiana benefit if your neighbor across the street increases her savings in order to invest more in the U.S. economy, you benefit if your neighbor across the ocean increases his savings in order to invest more in the U.S. economy.
Note that since 2000, Germany has every year run an annual trade surplus.
