It may seem incredible, but from 1889 to 1970, the United States of America had an aggregate trade surplus each year through its trade in goods with the world. That is to say, the United States exported more in goods than it imported from foreign nations for just over eighty years on a yearly basis. It needs to be acknowledged that while America in 1889 was a nation on the rise, it was not the preeminent nation in the world, but because of its trade surpluses throughout the decades from the late 19th century all the way into 1970, it was on its way to being the preeminent nation in the world, which it became. Yet, today’s America consistently runs a trade deficit in aggregate with foreign nations, and last had a trade surplus in 1975. This signifies that America has clearly lost its way, and may well be the reason why America has been so bellicose to other nations by using its military might to get its way, because it no longer can do so through trade.
While America has proven that it can still be a power to be reckoned with, despite its massive yearly trade imbalance, year in and year out, it needs to recognize, sooner rather than later, that it is using up its good name and is putting intense pressure upon the value of its dollar, by virtue of the fact, that it can’t keep its own house in order, because constant trade deficits are the mark of a nation in decline, and not in ascendency. A nation that is resting on its laurels, as contrasted to a nation that is innovative and a leader, reflects that not all is right within America. Indeed, the fact that America cannot seem to come close to running a trade surplus reflects that whatever America is concentrating upon selling to other nations represents the wrong mix, and the United States seemingly can’t figure out a way to correct such.
To believe, somehow, that the world will keep accepting dollars from America, for the products and services that they sell to America, is to not properly comprehend that nations that run huge trade deficits are going to have to eventually pay a penalty for their fiscal irresponsibility and while dollars are the orthodox medium of exchange worldwide, presently, that will not always be the case, because there comes a time, when other nations, will insist upon something of value, that maintains its worth, in exchange for the goods that they are selling, or the implementation of fiscal responsibility that must be adhered to.
The bottom line is that America is not the most populous nation in the word, and that the worldwide population is many times bigger than America, which signifies that to believe that America can increase its GNP at an enviable or even a reasonable rate is not possible, unless it sells outsides its borders, and because it can’t seem to sell nearly enough in return to what it imports, it is hollowing this nation out, so that those that own dollars, will surely rue the day when those dollars are significantly debased.