The U.S. buys more than it sells.  To the tune of about $711 billion in 2007.  We all know that we cannot spend more than we make in our households or businesses.  But the Very. Serious. People. in Washington told us deficits don't matter.

America has become the biggest debtor nation in the world.  When other countries became debtors with major problems, we and the IMF offered financial package contingent on austerity plans.  But when America becomes a debtor, we spend more money (can you say "stimulus package?") and lower interest rates for cheaper money.

I don't pretend to know whether a stimulus package is good or bad, but the underlying problem is our trade deficit that puts us in hock to other countries. 

Bernanke wants to lower interest rates again.  A temporary fix at best.

The hope is that lower interest rates will encourage consumers and businesses to spend more, while the risk is that the spending will aggravate inflation.

But the success or failure of the Fed’s strategy could depend on something outside Mr. Bernanke’s immediate control: foreign confidence in the American dollar and foreign willingness to keep financing the United States’ huge external debt.

America.  The lone superpower. 

Imagine if Bernanke weighed in and said the U.S. must pursue trade surpluses as a national strategy.  What about it Ben?

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