For Immediate Release
February 10, 2006
Contact: Kate Incontrera, 410 454-0417 or kincontrera@dailyreckoning.com www.dailyreckoning.com: Washington Fiddles While the Economy Burns BALTIMORE, MD - The U.S. trade deficit figures were released this morning, showing a record high for the U.S. in 2005. This data has Democrats in an uproar, provoking radical protectionist measures. This is the worst reaction we could have from politicians right now, asserts one NY Times bestselling author, explaining there is nothing politicians can do about the soaring trade deficit - it is an example of the rebalancing of the world economy. For all of 2005, the U.S. trade deficit was $725.8 billion - higher than most economists projected, and double the level it was when Bush took office in 2001. While the political parties are at odds over what - if anything - should be done about this, Addison Wiggin, author of Empire of Debt, explains that deficit is a symptom of what he calls America's "pathological consumption." "The U.S. consumer is a 'buyer,' rather than a 'seller,'" says Wiggin. "We need to get over the notion that our economy is strong and others are weak, merely because this is America. In the United States, the reason for the trade deficit is not a high rate of investment, but an abysmally low level of national savings." A $725.8 billion trade deficit is 5.8% of GDP. These numbers come on the heels of news that the U.S. savings rate was net negative for the first time since the Great Depression. "We are spending more, and producing less - we have to borrow to make up the difference," says Wiggin. "Americans have been refinancing their homes and selling financial assets to pay for consumption." For more from Addison Wiggin, see http://www.dailyreckoning.com Addison Wiggin is editorial director and publisher of The Daily Reckoning. He is also the co-author, along with Bill Bonner, of the recently released New York Times bestseller, Empire of Debt: The Rise of an Epic Financial Crisis. Brought to you by Agora Financial, and written by the NY Times bestselling authors, Bill Bonner and Addison Wiggin, The Daily Reckoning is a daily, free e-letter that weaves information about the financial world, investing and everyday life into an educational and entertaining format that has been engaging their readers for over six years. SOURCE www.dailyreckoning.com | 
