Rising U.S. Exports Unable to Close Trade Deficit

The President has made doubling U.S. exports a national priority.  It's awesome when our nation's leaders set mighty goals for our progress, and for big things like the Apollo moon landings we can definitely deliver.  Doubling exports is a bigger undertaking than manned space flight, which is why we need industry's brightest minds on the President's Export Council to make it happen.  The President and his Council think we're "47 percent, 50 percent" of the way to the goal.  Well, which of those percentages is it?  Let's make sure we have the correct numbers.

The U.S. Census Bureau's Foreign Trade Division maintains the nation's official import and export statistics.  Clicking the "Data" tab takes us to a page where we can find a historical series of trade data.  I like the PDF version of the data going back to 1960.  The line for 2009 shows total exports of US$1.58T, and in 2012 we had total exports of US$2.19T.  That's an increase of $610B, or 38.6%.  That's nowhere near the 47-50% claimed by the chairman of the Export Council.  I have to walk my readers through the elementary school math because leaders in business, government, and media are unable to figure this out.  Meeting the President's goal of doubling exports by the end of 2014 means we have to get to US$3.16T no later than 21 months from now.  That's about another one trillion, almost twice as much as the $610B gain that took three years to get.  Imagine the acceleration in export growth required in a shorter time frame and you'll see the likelihood of what we finance types call a bad news event.

Let's not forget the chart on the Census's summary page showing us where the nation's trade deficit currently stands.  I've reproduced the chart for January 2013, the latest month for which data is available.

That beige-colored band in the middle is the trade deficit.  No matter how much we raise the value of our exports, they can't catch up to imports.  The trade deficit's gnarly beige band persists month after month.  The quote for this chart dated March 7, 2013 says it all:  "The Nation’s international trade deficit in goods and services increased to $44.4 billion in January from $38.1 billion (revised) in December, as imports increased and exports decreased."

I'm totally unqualified to serve on the President's Export Council because I can perform grade school math and report the results in plain English.  I'm also unqualified to serve as chairman of the Federal Reserve or Secretary of the Treasury because I think spending money we don't have and debasing the money we do have has obviously not closed the trade deficit.  On the other hand, it's nice to be self-employed, because I don't have to make up export numbers just because that's what the boss wants.