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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 229.55+0.2%Dec 5 3:59 PM EST
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To: Skeeter Bug who wrote (123417)4/10/2001 2:13:35 PM
From: Wayners  Read Replies (1) of 164684
 
The United States usually runs a deficit on merchandise trade and a surplus on services trade. In 1998 for example, the merchandise or goods trade balance, was a deficit of $246.9 billion. The services balance was a surplus of $82.6 billion. Together, these put the trade balance deficit at $164.3 billion or about 1.9 percent of GDP. Since U.S. liabilities to foreigners exceed U.S. claims on foreigners by about $1 trillion, net income from foreign investments was a negative $56.3 billion in 1998. Combining that with the trade deficit of $164.3 billion gives a current account balance in deficit at $220.6 billion or 2.6 percent of GDP.

It is not too misleading to use the trade balance and current account balance interchangeably, remembering that the only difference between the two is the fairly stable number between 50 and 60 billion dollars of net income or outflow on the United States’ net foreign asset position. With the U.S. net foreign asset position at about negative

$1 trillion and annual income (GDP) at $8.5 trillion, U.S. global indebtedness is not too alarming, and is something like a young professional household with $85,000 in annual income carrying $10,000 in net debt.
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