The U.S. Bureau of Economic Analysis today announced that U.S. exports for January were $4.4 billion higher than in December. This is good news for U.S. exporters.
The bureau also reported that Americans imported $10.5 billion more in January than in December. This is good news, too.
As President Obama’s Council of Economic Advisers recently reported, economic growth in other countries leads to increased U.S. exports. When people in other countries escape poverty and become richer, more of them are able to afford U.S.-made products.
Just as economic growth in other countries enables more people to afford U.S. exports, economic growth in the United States enables Americans to spend more on imports.
Misperceptions about the actual impact of international trade flows abound. For example, the Associated Press today “reported” that “a widening trade deficit hurts the U.S. economy. When imports outpace exports, more jobs go to foreign workers than to U.S. workers.”
Apparently the AP slept through 2009, when the U.S. trade deficit shrank by 46 percent and the unemployment rate increased by 60 percent. In fact, there is nothing in either economic theory or the data to justify the AP’s wildly inaccurate assertion.
Americans benefit from economic growth in other countries, which increases exports. We also benefit from economic growth in the United States, which increases imports. The best way to achieve both of these desired results is to encourage economic freedom both here and abroad.