Enormous, Humongous November Trade Deficit Drags Economy Down

Dave Johnson

The U.S. Census Bureau reported Friday that the November trade deficit was $45.2 billion. This is up $2.9 billion from a revised $42.4 billion in October.

Exports fell 0.2% to $185.5 billion from the prior month while imports climbed 1.1% to $321.1 billion.

The trade deficit in goods increased $3.4 billion to $66.6 billion.

Again, these enormous, humongous trade losses were in a single month.

According to a Wall Street Journal report on the November trade deficit,

The U.S. trade deficit widened again in November, creating a likely drag on overall economic growth as the year ended.

[. . .] Forecasting firm Macroeconomic Advisers on Wednesday said it expects GDP to expand at a 2.2% pace to end the year, a marked slowdown from the third quarter.

An analysis from the Coalition for a Prosperous America (CPA), CPA Economic Analysis: International Trade Has Depressed US Economy Since 1982, explains how trade deficits resulting from Wall Street’s “free trade” ideology has been dragging down our economy,

A careful look at one of the Obama Administration’s best-known economic documents in favor of free trade is revealing: the study that the Administration claims supports free trade actually found that since 1982 the impact of free trade on the US economy was negative, not positive. Free trade has actually reduced economic growth since 1982!

… Productivity gains between 1982 and 2002, according to their own data (see Table 2.4, pg. 82 of their study) were exactly zero. Well not exactly. In fact, productivity gains delivered between 1947 and 1982 totaled $634 billion. Productivity gains between 1982 and 2002 totaled negative $1 billion.

[. . .] A trade deficit indicates that US consumers and businesses are buying more goods and services from abroad than foreigners are buying here. That has a contractionary effect on the economy because it reduces demand for American products, GDP and employment. The US has been running a growing trade deficit since 1975, which reached $531 billion last year.

The second is the unemployment created by the negative impact of trade policy on certain industries. Economists have shown that many workers made unemployed by import competition often don’t find new jobs for many years, and some never do.

Economists use a lot of words to explain that buying more than you sell is bad for your long-term prospects. It might be great for a few “investors” at the top — for a while — but history shows that a country that for decades sells off its manufacturing ecosystem, devastates communities like Detroit and entire regions like the “rust belt,” lays off millions and keeps wages stagnant for the rest ends up with a Trump finger on the nuclear button.

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