I'll say one thing about the President: He thinks big and likes to set records. If he can break $617B this year, I say we go for a trillion next year!

Seriously though, at what point does this trade deficit become a real problem? Every year of the Bush presidency, the gap between the things we sell to other nations and the things we import from other nations grows larger. So far this issue just seems like more meaningless numbers to the American public.

I say meaningless because, like our embarrassingly low savings rate, trade numbers dont cause anyone to change their behavior. But one cannot borrow forever. At some point the bills come due and those bills to finance our debts are paid with tax money.

No one is going to want to raise taxes to pay our interest payments but we seem to make fewer goods in this country every year so what will ever happen to reverse the trade deficit? Monthly exports are about $100B and imports are roughly 70% higher at $170B. That's quite a gap.

U.S. Trade Deficit Swells to a Record

Energy Costs Lift Imports; Gap With China Widens As Bush Plans Beijing Visit

By GREG HITT and JOI PRECIPHS Staff Reporters of THE WALL STREET JOURNAL

November 11, 2005

Overall, the trade gap is on pace to easily exceed last year's record of $617.58 billion and also is expected to keep a damper on U.S. gross-domestic-profit growth, which was an annualized 3.8% for the third quarter of this year.

The U.S. deficit with China came in at $20.10 billion for the month, staying on track to break the 2004 record of $161.97 billion. The report comes just before President Bush's planned visit to Beijing and is certain to step up pressure on the Chinese to make new adjustments in the country's currency exchange rate. The big deficit with China is a major irritant in trans-Pacific relations, fueling anti-China sentiment in Congress and prompting the Bush administration to adopt a toughened line on trade. Among other things, the administration is making a major push to force Beijing to crack down on the piracy of U.S. intellectual property.

For the first 10 months of this year, China's trade surplus hit $80.4 billion, compared with $32 billion for the whole of 2004. Most economists believe the full 2005 surplus will reach $100 billion, a record.