Monthly Trade Statistics Report: Misleading and Dangerous

Bryan Riley / June 09, 2011

The U.S. Commerce Department today announced that the trade deficit for April was $43.7 billion.

This number is misleading because it implies a “deficit” in terms of dollars leaving the country, which is not the case.

For example, the trade deficit numbers do not include the billions of dollars foreigners spend on U.S. Treasury bonds to help finance our government’s enormous budget deficit. Last year, foreigners spent an average of $59 billion per month on U.S. Treasury bonds.

Also not included are the dollars people in other countries invest in the U.S. economy, either directly by building factories here or indirectly by buying stock in U.S.-based companies. New foreign direct investment averaged over $16 billion a month in 2010. (more…)