Hearts and Minds: Thoughts on Danny Okrent, the New York Times, and Time
Paul Krugman on "Risks" to the Forecast

Snort! Snort! Guffaw! Guffaw! Snort!

Bush's Council of Economic Advisers redefines our trade deficit to be a *capital account surplus.* "Surplus" sounds so much better than "deficit", doesn't it?

Snort, snort, guffaw, guffaw, snort.

Max Sawicky is more polite:

MaxSpeak, You Listen!: DON'T CALL IT A TRADE DEFICIT : So says the new Economic Report of the President... in a chapter entitled "The U.S. Capital Account Surplus." "Surplus" sounds much better, don't you think? We've got a surplus in the capital account. Capital is flowing in. It shows foreigners love us, they really love us.... Capital account surplus means foreigners are taking increasing ownership of U.S. dollar-denominated assets, since we buy more from them than we sell to them. It's like this: if you own your home free and clear and take out a mortgage to buy skittles and beer, you've got yourself a capital account surplus.

We learn, in this chapter about the movements of capital, that the best thing the U.S. can do about the surplus is to raise national saving. Turns out that "At 13 percent of GDP... the U.S. domestic saving rate is the lowest among the advanced economy countries," them Euro-socialist countries with the big, bad tax systems. Much else can be done to reduce our trade deficit capital account surplus, according to the report, but it all must be done by other countries.... Worse, the savings rate has decreased since 1995, the bad old days of sky-high Clintonian Euro-socialist taxes. One component of this rate is the rise in the Federal deficit after 2001.... The reductions in the top marginal rates and the special preferred rates on dividends and capital gains are the jewels in the crown of supply side tax policy. They are supposed to raise saving. How can you not get more saving if you increase the returns to saving? It's like a law of physics, goddamn it...