WP/AP: Trade Deficit Soars to Record High

Trade Deficit Soars to Record High
Numbers Reflect Higher Oil Prices
By Martin Crutsinger
AP Economics Writer
Monday, December 18, 2006

WASHINGTON -- America's deficit in the broadest measure of trade shot up to an all-time high in the summer, reflecting the huge jump in the country's foreign oil bill.

The Commerce Department reported Monday that the current account trade deficit increased 3.9 percent to a record $225.6 billion in the July-September quarter. That represented 6.8 percent of the country's total economy, up from 6.6 percent of the gross domestic product in the spring quarter.

The current account is the broadest measure of U.S. trade because it tracks not only the flow of goods and services across borders but also investment flows. The figure is closely watched by economists because it represents the amount of money the country must borrow from foreigners to make up the difference between what America imports and what it sells overseas.

The current account deficit is expected to hit a new record for the full year, far surpassing last year's $791.5 billion imbalance even though the shortfall for the fourth quarter is likely to show an improvement, reflecting the drop in oil prices after hitting records this summer.

Democrats, who took over control of the House and Senate in the November elections, attacked President Bush's trade policies, charging that the administration has run up record deficits for five straight years by failing to protect U.S. workers from unfair foreign trade practices....

http://www.washingtonpost.com/wp-dyn/content/article/2006/12/18/AR2006121800205.html

''free'' trade isn't so ''free'' -- it has costs that we all pay up and odwn the economic spectrum.

oh yeah -- and no more off shoring corporate bank accounts.

We send them pieces of paper, they send us stuff.

The capital inflow is necessary because of our negative domestic savings rate. Eventually things will balance out but I hope the Democrats don't try to implement Sen. Dorgan's silly certificate scheme.

they are also getting industrial capacity and our national secrets.

:banghead: