The Trade Deficit Is Up, But It’s Not Donald Trump’s Fault

Kevin Drum

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The New York Times reports on the trade deficit:

The U.S. trade deficit in goods and services continued to climb in August, growing 5.9 percent from the previous month to $67.1 billion, the highest monthly level since 2006, as American imports outpaced exports….The rising trade deficit comes at an inconvenient moment for the Trump administration, which is eager to declare victory on its trade agenda as the election approaches. Economists caution against using the trade deficit as a measure of the economy’s health, but President Trump views the figure as a measure of his success in rewriting trade deals in the United States’ favor.

Poor Donald. But just this once, I’ll defend him. The trade deficit, by definition, is equal to government savings plus personal savings. Because of the pandemic, the federal government is running a big deficit, so government savings are negative. Likewise, thanks to high unemployment, households have been eating into their savings since April, which means that personal savings aren’t rising to make up for this. This makes it inevitable that the trade deficit is going to increase.

So it’s not really Trump’s fault. Like nearly every economic indicator these days, the trade deficit has to be taken with a grain of salt thanks to government shutdowns caused by the COVID-19 pandemic.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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