[adios]

[ QUOTE ]
The US has a laughably low savings rate. In order for it continue investing in new technologies and industries it must acquire capital from abroad. Since it is running a surplus in capital flows, it must run a deficiet in the trade balance in order for BoP to balance. So really it is our inability to save that leads to trade deficiets. Main culprits in this are:
1) Spend happy deficiet happy congress and president.
2) Low real interest rates.
3) Loose credit policy.
4) Taxation of investment income.
5) American culture of consumer spending.


[/ QUOTE ]

I think it would be safe to say that folks in the Bush administration and probably Greenie would add another one:

6) Lack of consummer spending in many parts of the world including Europe and the Mid East due to stagnant economic growth which is in part due to overly restrictive monetary policies and high taxes.

I would add number seven which is really part of 5

7) Fossil fuel consumption which is a major component of the trade deficit in the U.S.


I don't necessarily agree with your five reasons but I don't want to hijack the thread either.

To get back on topic, my guess is that Nicky's scenario involves workers from third world countries working in 1st world countries and sending money home to their countries in the form of taxes and various stipends. I'm not an economist but I think it's a problem because it implies alot of weakness in local the third world economy if you will. Employment opportunities in the third world country are lacking and the third world county is a "slave" to economic growth in the first world countries where their workers are employed. It would be preferable to grow the economy of the third world country such that more employment opportunities would be created.