BCT Editorial – 9/18/06

This page was last updated on September 18, 2006.

Debtors’ prison; Editorial; Beaver County Times; September 18, 2006.

Below is a detailed critique of the subject editorial.

“Energy independence is a matter of national security, and not just in the traditional military way.

“The Associated Press reports that the U.S. trade deficit in July increased to $68 billion, an all-time high. It wasn’t very hard to figure out the reason why: record oil prices.

“Through July, the deficit is running at an annual rate of $776 billion, putting the country on course to rack up a record deficit for the fifth straight year, The AP reported.

“Our dependency on imported oil is a security issue because we’re sending money overseas that we don’t have. To get that money, we’re borrowing it, increasingly from foreigners.

“Eventually they’re going to be able to call the tune to which we will have to dance because they will control both the oil to which we are addicted and our finances.

“Every day we waste puts us closer and closer to debtors’ prison.”

[RWC] I wonder if any Times editorial authors studied even rudimentary economics? If so, you can’t tell it from the editorials.

In this editorial, the author seems to believe budget and trade deficits are the same thing. That is, if you run a trade deficit, you are somehow in debt to your trading partners. That’s ridiculous.

Here’s an example. When you purchase groceries from the local supermarket, you run a trade deficit because the supermarket didn’t buy anything from you. Does that put you in debt to the supermarket, or anyone else for that matter?