Nothing fails like success.
As recently as a half-century ago, the American stood like a colossus in a New World...young, free, healthy; and a creditor to the rest of the world, which owed him not only money...but liberty, for he had lent his muscle, his oil, his manufacturers - and even risked his life to win World War II for the Allies.
"What can be added to the happiness of a man who is in health, out of debt, and has a clear conscience?" asked Adam Smith.
Here at The Daily Reckoning headquarters, we too are occasionally beset with bouts of debt-free happiness. But we count on our natural gloominess to get us through.
But...what about people who have more debt than any one else...whose health suffers from too much sustenance...and whose conscience is encumbered with a bloody war made on people they didn't even know, for a purpose no one knows? Can they expect happiness?
As to their conscience and health, we have no opinion. But as to their debt we have many.
Fallen into our hands is a report from the CIA, ranking nations in order of their current account balance. The current account, we remind readers, is like the operating statement of a business or an individual. Income must exceed outflow or your upkeep is your downfall. The difference between what comes in and what goes out, if it is positive, accumulates as though it were a profit. If it is negative, it builds up - but not necessarily, in the form of debt.
So what do we see? The country with the best position is Japan - with a current account balance of plus $165 billion. China is in the number two position, with almost as much. And here we pause to give readers a chance to gasp. China - a country run by communists - has the second best current account balance in the world. Figure that. In other words, Marxism...at least as practiced in the Middle Kingdom...has proven no bar whatever to capitalist success.
But we will move on...
Germany is the third most 'profitable' country in the world - with a positive current account balance of $115 billion. Then the list goes into various oil producers, watchmakers, and assorted national curiosities...such as Algeria...with - would you believe it - has an $18 billion surplus! Even tiny Hong Kong ended last year nearly $20 billion to the good.
But between Swaziland and the Comoros (which, we believe is an island nation somewhere off the coast of Africa) the figures make the kind of transformation that can only be likened, in the material world, to going from light to darkness, or in the sentient world, from life to death. That is, they go from positive to negative. The numbers which were such a comfort to Germany and such a delight to Japan become an embarrassment.
Poor Burkina Faso, perhaps the most God-forsaken hole on the surface of the whole planet, suffers a $438 million deficit and still manages to hold its head up in public.
"Hey, wait a minute," said a friend at a dinner party recently, "Burkina Faso is not so bad. My wife and I love to go there for desert trekking. There is nothing there...no restaurants...no hotels you'd want to go to...no theatres...not much of anything. But out there in the natural world... in the desert, there is a quality that is sublime. I wish I could describe it to you...but you have to see it for yourself."
That said, at least Burkina Faso is far from the worst on the CIA's list. The rest of Africa follows...and then come the Banana Republics of Latin America...and finally, guess who makes the end of the line-up? Guess who has the worst current account deficits in the entire world? Guess which countries spend more than they earn - regularly and spectacularly?
Last in line are the nations of the Anglo-Saxon, English-speaking debt-based empire! New Zealand has a deficit of nearly $10 billion. Then, South Africa...and India...and Australia all have deficits too. Among the major former colonies of the British Empire, only Canada seems to have any sense. It runs a surplus. The others are all debtors. The UK itself is third from the bottom with a $57 billion negative current account balance.
For no reason we can think of, the penultimate on the list is Spain. And then comes the worst of all...the United States of America, with a current account balance of a minus $829 billion.
Add up all the deficits of the entire world and you get a figure barely half of the U.S. total.
The U.S. economy makes up a quarter of the world total...that it should have more than half of the world's current account deficits is a spectacular success - only made possible by its great wealth and status.
And here, in yesterday's news, comes the latest: "Record $68 billion trade deficit in July," reports Bloomberg.
Nothing fails like success.
If you'd like to check out the facts for yourself, go to the CIA Factbook. [The CIA can't be wrong about this. After all, didn't they provide irrefutable evidence that Saddam had weapons of mass destruction! ;-) ]
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