Sounds Good

Works poorly.

WASHINGTON (Reuters) -- Congressional Democrats called on Tuesday for the Bush administration to develop a comprehensive plan to reduce the record U.S. trade deficit, including action against what they called trade barriers and unfair trade practices in China, Japan and the European Union.

"We ask you again to join us and develop a meaningful action plan that addresses the burgeoning deficit," House of Representatives Speaker Nancy Pelosi and other senior Democrats said in a letter to President George W. Bush.

The call followed a Commerce Department report showing the U.S. trade deficit widened 6.5 percent in 2006 to a record $764 billion. That included bilateral gaps of $233 billion with China, $117 billion with the EU and $88 billion with Japan.

The problem is that the proposals are fluff. The biggest causes of the "trade defecit" (gap between exports and imports) are not the items listed. They include surging oil prices (more expensive foreign oil = more $ assigned as imports), local demand, an American affair with buying things, and certainly not least domestic legislation such as the minimum wage.

The biggest problem is this: "The House Democrats offered no specific proposals for addressing broad economic factors, such as a low U.S. savings rate and strong consumer demand, which many economists believe are major causes of the U.S. trade gap."

The trade defecit is something that eventually works itself out in a free-flowing economy, in exchange rate fluctuations. But the headline on the article is "Democrats call for US deficit plan" which makes it sound like the Federal Budget defecit is being addressed, and this is not true at all.

That is a real problem. But a difficult and painful one to solve, which leave politicians trying to justify their own existence by pushing this fluff. It frustrates me.