Commentators should also mind their tongues when it comes to trade. America's trade balance is said to 'improve' as its deficit shrinks, Germany's to 'deteriorate' as its surplus disappears. Yet a trade surplus is a misleading measure of a country's economic strength, or a deficit of its weakness. Barring further information, it is neutral. For as long as foreigners were willing to finance the American deficit, Americans enjoyed a higher standard of living than they otherwise would have.
Economic commentators take note.
Trade surpluses and deficits increase, rise, grow, widen, or swell, but they never improve. The Economist, Aug. 31, 1991. Many pundits claimed that a wanton binge of consumption, mostly financed by foreigners, had destroyed U.S. competitiveness. But fully one-third of the imports consisted of capital equipment imports. A dollar of the trade deficit was four times more likely to be spent on industrial equipment than a dollar of domestic GNP. . .