Sunday, May 20, 2007

Yeah, that's a puzzler, all right.


Simply excerpting from this wouldn't do it justice, so here's Blogging Tory Dave Hodson in his entirety:

Over the last week, we’ve seen many reports that Canada’s trade surplus fell slightly to $4.6 Billion in March from $5.2 Billion in February. What has me confused, is how most of the media always report an increase in imports as inherently bad? When exports rise, media reports take on a positive tone, saying what a good job the country has been doing. When imports rise, the tone of the reports shift to sound more like someone explaining to their boss why they screwed up!

The fact is, we need both imports and exports, and we really can’t have one without the other. We trade with other countries because we each have comparative advantages in the supply of different things. We export what we’re better at supplying, and import what we’re not.

To read some opinions in the media, we should constantly be striving to increase exports while cutting off the stream of imports. But what good are exports without imports? When we export things to other countries, we receive money. We then use this money to import things from other countries. If we don’t import anything, then what good are the payments we receive for our exports?

Join Dave next week when he explains how, when you use a credit card, that stuff isn't really free but you still have to pay for it later, and how bummed out he was when he learned that.

1 comment:

the rev. said...

Yeah, if you make money but never spend it, soon all your debts are paid off and it just piles up in the bank -- then you have to count it. What a pain in the ass it is to make more than you spend.