re:  Decoding Davos:  Headlines from the World Economic Forum

In exhorting the United States to "get our own house in order" with respect to economics and prosperity, the Chronicle editorial staff certainly chooses a strange mix of remedies.  On the one hand, "towering deficits and a ballooning national debt" are (rightly) mentioned as a drag on the economy in need of a fix; however, the editorialists subsequently criticizes the "gridlock" that has ensued over so-called "health care reform" — the specific plans for which, as passed by the House and Senate, would add trillions to future deficits and debt, while restricting economic growth with tax increases, mandates, and prohibitions.  Not a good recipe for curing an economic malaise.

The Chronicle then lists with derision a persistent "balance-of-trade deficit", ignoring the fact that such "deficits" in balance of trade (also known as the current account) correspond with a surplus in the capital account.  When American consumers choose to spend their dollars on goods and services from foreign-based companies, those companies don't just bury the dollars in the back yard.  Instead, those dollars are invested back in the United States — in bonds, in stock shares, in factories, etc.

If the US wants to promote prosperity, it should promote the engines of economic growth:  trade, entrepreneurism, innovation, production.  Higher taxes and barriers to trade and investment promote none of those things.

Sincerely,
Dave Smith
Houston, TX