Tuesday, December 7, 2010

Trade Imbalance

As an American, I say our trade imbalance is a bad thing. It looks like this:


$44B in the hole. Wow... I could do a lot with $44 billion. But that's not really the right context.

Our trade imbalance subtracts $44 billion from the GDP.

The GDP is $14 trillion for the year.

The trade imbalance is $44 billion for the month. Rough it up, multiply by 12: The trade imbalance is $528 billion for the year.

14 trillion is 14,000 billion.

528 billion is 3.8% of 14,000 billion.

The U.S. trade imbalance is less than four percent of GDP. It's a bad thing. But it's not a big thing. We have bigger problems to deal with.

No comments: