Focus Point - The Truth on TradeCommentary by Pete du Pont
January 27, 2000
I'm Pete du Pont with the National Center for Policy Analysis. I will now demonstrate the difference between people who understand the meaning of free trade, and those who don't.
On December 16, the census bureau reported the largest monthly trade deficit in U.S. History: $26 billion in October.
If you said "that's terrible!" you don't get it. If you said "no problem!" you do.
That's because the trade deficit is a reflection of the U.S. economy's strength, not its weakness. The flip side of the trade deficit is the huge surplus in what's called the capital account, which measures investment flows in and out of the country. So the current trade deficit reflects one of our economy's greatest strengths -- its attractiveness to the world's investors, who see a booming business climate and who'd rather put their money here than any other major country. More investment here means more business, more jobs, more exports. The huge inflow of foreign investment is both a sign of the economy's strength, and a contributor to it.
Those are my ideas, and at the NCPA we know ideas can change the world. I'm Pete du Pont. Next time, where's chicken little?