First, by way of follow up, two friendly reminders: the TSA’s Trusted Traveler System is still not a get out of the security line free card; and Social Security is not a savings plan of any sort and thus anybody who talks about the “returns” on Social Security either does not understand the system or is trying to manipulate you.
The day’s headline economic news may be the Fed raising short term interest rates, but the Fed is not acting in a vacuum. Part of the Big Picture for the United States economy is the record trade deficit. Not only does this mean that we are importing more stuff than we are exporting, month after month, in spite of a low and dropping dollar, it means that more money is leaving the country than entering it each month. As if that were not bad enough, the trade deficit is one of the factors used to calculate Gross Domestic Product, so don’t be shocked if GDP estimates get lowered.
The Bush Administration says this is mostly because of high oil prices, which OPEC keeps high because the dollar is weak and oil trades in dollars. Another huge factor is our trade deficit with China, which is going to get worse after the first of the year, when textile quotas are eliminated. Many of the 700,000 American textile workers may lose their jobs, but we will all be able to buy cheap anti-microbial underwear.
The part of the trade deficit that nobody is talking about is that the United States no longer has a trade surplus in agricultural goods. It is difficult to overstate the importance of this fact. Over and above the fact that there is no longer a food export surplus to offset other imports, over and above the impact on the family farmers and ranchers for whom we are told “death tax” repeal was critical, over and above the dizzying drop from a $13 Billion annual surplus in 2001 to no surplus now.
In addition to being dependent on foreign nations for oil, we will soon depend on foreign nations for food.
Now does Tommy Thompson’s warning on food safety make more sense?