November 1, 2013
SOMETHING THAT CAN’T GO ON FOREVER, WON’T: Everyone Wants To Go To Export Heaven.
What’s interesting is that we’re having exactly the same ritualistic spats that we were having 10 years ago, when I first started writing for the Economist. Japan, China and Germany are entirely dependent on exports to keep unemployment to a low roar. The U.S. is running a persistent current account deficit and, in fact, hasn’t been in the black since 1990.
No one thinks this is sustainable. But none of the big players wants to end it, either; Americans aren’t ready to actually start saving like a grown-up nation, and the export powerhouses are desperately trying to accumulate a massive hoard of IOUs before their entire populations age into Centrum Silver territory.
Yet unlike Germany, Japan and China, the U.S. feels the need to actively argue in favor of its own position. China doesn’t go around trying to get other nations to export a quarter of their gross domestic product. In fact, China would rather not have the competition. But the U.S. has to complain. And I have to wonder if we don’t feel a bit guilty about our running tab with, well, the rest of the world. We’re like a drunk who wants to reform but knows he lacks the willpower, so he urges the bartenders to close down and take up haberdashery. Which is a good guide to how effective the whole thing is.
Promises that can’t be kept, won’t be. Debts that can’t be repaid, won’t be. Plan accordingly.