Outsourcing is good for America eh!
2005 trade deficit hits record of $725.8B
From wire reports
WASHINGTON — The U.S. trade deficit soared to an all-time high of $725.8 billion in 2005, pushed upward by record imports of oil, food, cars and other consumer goods.
The deficit with China hit an all-time high as did America's deficits with Japan, Europe, OPEC, Canada, Mexico, and South and Central America.
The Commerce Department reported that the gap between what America sells abroad and what it imports rose to $725.8 billion last year, up by 17.5% from the previous record of $617.6 billion set in 2004.
It marked the fourth consecutive year that America's trade deficit has set a record and was certain to spark increased debate in Congress over President Bush's trade policies. Since mid-2000 the country has lost nearly 3 million manufacturing jobs and Democrats blame the administration's flawed policies of emphasizing free trade agreements.
The United States imported a record $175.6 billion of crude oil in 2005, paying a record average price of $46.78 per barrel.
The U.S trade deficit could approach $1 trillion annually if it continues to grow at the current pace, but that is only a worry if foreigners become unwilling to finance the debt, said Drew Matus, senior financial economist at Lehman Bros..
"There have been historical precedents where people have spent well in excess of what they've earned from foreign trading partners for extended periods of time and nothing has happened," Matus said. "The big wild card is you have a reserve currency (such as the dollar), how much extra room does that give you. That's the $100,000 question, or the $100 million question, or the $1 trillion question."