Perspective

   We hear a lot about the international trade deficit, and what a terrible thing it is that there is a negative balance of payments in international trade, to the tune of $43 billion in February alone. Which is pretty big number. Like the man said, a billion here, a billion there, soon you're talking about real money.
   But let's put it into some perspective. One big reason why America buys more stuff from overseas suppliers than the country sells to overseas buyers is that Americans have more money. It's a pretty rich country, after all, with a total value of everything produced (GDP) coming to $16 trillion a year.
   Consider this: That $43 billion is one-quarter of one percent of America's yearly output -- 0.26 percent, to be exact. And over the course of a year, that's about 3 percent. Meanwhile, all the goods and services America exported during February came to a value of $186.0 billion, up from $184.4 billion in January, according to the government's Commerce Department. And over the past 12 months, that added up to $2.2 trillion in stuff and services sold to overseas buyers. That's a bit more than 12 percent of total output. Not bad. The deficit in balance of payments, meanwhile, even though it totaled $475 billion last year, was still only 3 percent of the total economy.

   Politicians like to make a lot of noise about "negative" numbers, partly as a way to lambaste incumbents and make it look like they're doing a terrible job. And while some countries have an advantage in making stuff, partly because of lower wages and availability of raw materials, other countries have an advantage in providing services, such as design, marketing, analysis, distribution and sales. And some regions can increase their production despite higher labor costs by using technology. It's called comparative advantage, and was identified by Adam Smith in 1776.
   It's also true of regions within nations. At the turn of the 20th Century, about half of New Jersey's labor force was involved in agriculture -- that's why it's called the garden state. A similar percentage was applicable nationwide. Today, however, the number of people working in agriculture is well below 10 percent, and the country still grows enough stuff so that it can export food. Reason: Technology, mechanization, and efficiency, thus enabling agriculture workers to move off the farm and into the cities, where higher-paying jobs in manufacturing, distribution, sales, finance and other fields were growing.

   So is there a trade deficit, and do Americans buy more stuff than they sell? Yes. Will it last? No. International trade is like an ocean tide -- it comes and goes, but the shoreline remains pretty much the same. Barring natural disasters, of course, but what happens then? We rebuild.