Tuesday, March 29, 2005

Spiritual dimension of trade deficits

Are you concerned about the huge trade deficits the US has been running? Every month it seems like a new record high is racked up. How will this affect the economy in the long term? Recently I read an article in the Wall St. Journal which said that we shouldn't worry about them because it means other countries are investing in the US. I'm no economist but that's like saying people who run up huge credit card bills shouldn't worry because the companies they're buying from are investing their goods in them. Eventually the bill comes due.

Other economists are getting worried because it's throwing the world's economy out of balance. The US can only do this because the dollar is the world's reserve currency. But who knows how long that will last?
Anyway, while a lot of essential things like food and oil are imported, a lot of the things from China are nothing more than consumer goods. That's where I see a spiritual connection. Are Americans so intent on getting more and more "stuff" that our consumer spending is risking serious economic upheavals? While consumption spending can bring temporary business benefits, in the long run we can't consume our way into prosperity. Could it be that a more spiritual outlook on life that minimizes "stuff" might actually benefit the economy by encouraging more saving and investing for the long term instead of short term spending?

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