U.S. trade deficit is 2nd highest

[BuddyLee]

For the year, America's trade deficit is running at a record annual rate of $590 billion, 19% higher than the previous record, last year's $496.5 billion.

In a second economic report Thursday, the Labor Department said the number of Americans filing new claims for unemployment benefits rose 15,000 last week to a seasonally adjusted 352,000. The four-week moving average of claims, which smooths out weekly changes, rose 4,000 to a seven-month high of 352,000.

The report on jobless claims reflects a labor market that is continuing to confound economists' expectations. The country added a lower-than-expected 96,000 jobs in September as the unemployment rate held steady at 5.4%.

http://www.usatoday.com/money/economy/trade/2004-10-14-aug-deficit_x.htm?csp=24&RM_Exclude=Juno

This is what scares me. Being in the deficit we are in now how do you think our economy is staying afloat? China, Japan, and other Asian countries are buying bonds. What happens when they go to cash in the bonds a decade or two down the road with the deficit we have now? Bad news. My prediction is that China becomes a super power in the next 20-30 years and we go one step lower on the global game.

 

[dustin]

Its all in cycles. No singular economy will continue to gain strength its entire life. Downfall is inevitable and will happen sooner or later. The question is will we be able to recover a drastic downfall.

Just be sure to take into account the war on terror, which is probably claiming the majority of that increase in deficit.

 

[Bruzilla]

I might be wrong, but I would guess that the US trade deficit has been one of the world's highest since the end of WWII. What's different today other than the amount, and corrected for inflation it's probably not as high as it was in the 70s or 80s.

 

[FromTexas]

http://www.usatoday.com/money/economy/trade/2004-10-14-aug-deficit_x.htm?csp=24&RM_Exclude=Juno

This is what scares me. Being in the deficit we are in now how do you think our economy is staying afloat? China, Japan, and other Asian countries are buying bonds. What happens when they go to cash in the bonds a decade or two down the road with the deficit we have now? Bad news. My prediction is that China becomes a super power in the next 20-30 years and we go one step lower on the global game.

This is talking about trade deficit, not public debt. Even when talking about our budget running a deficit. A deficit is just the amount in the negative, it is not referring to the debt. So, the national debt is not the national deficit.

 

[FromTexas]

http://www.usatoday.com/money/economy/trade/2004-10-14-aug-deficit_x.htm?csp=24&RM_Exclude=Juno

This is what scares me. Being in the deficit we are in now how do you think our economy is staying afloat? China, Japan, and other Asian countries are buying bonds. What happens when they go to cash in the bonds a decade or two down the road with the deficit we have now? Bad news. My prediction is that China becomes a super power in the next 20-30 years and we go one step lower on the global game.

Also, most public debt is owned domestically and not by foreigners. The large majority belongs to us. It is one of the reasons our deficit really can't get larger than we can handle. There must be money to purchase the debt. 85-90% of that money comes from our businesses, pensions, and private citizens (also agencies like social security, etc... own debt for those functions). The public debt is thus a safe investment interest paying a guaranteed rate (or variable rate) to those entities which only invest as much as they can according to their portfolio requirements (some are legally bound only to buy government securities for investment purposes [i.e. certain state and local government pensions, etc...]). It is a function of our domestic ability to save with a small portion sold overseas.

You can't make American's buy the debt from you, so you are limited by the ability to invest.

 

[Spoiled]

http://www.usatoday.com/money/economy/trade/2004-10-14-aug-deficit_x.htm?csp=24&RM_Exclude=Juno

This is what scares me. Being in the deficit we are in now how do you think our economy is staying afloat? China, Japan, and other Asian countries are buying bonds. What happens when they go to cash in the bonds a decade or two down the road with the deficit we have now? Bad news. My prediction is that China becomes a super power in the next 20-30 years and we go one step lower on the global game.

my man, i consider china the other world power asside from the US... its hard for me to explain now, i think china is one step below us but i know if they were to goto war with us we could be introuble, the could probably build a bridge of corpses to our country...


sorry im not in the best state of mind...