Deficient Doomsters
27 January 2009
Editor, The New Yorker
Dear Editor:
Ben McGrath's report on modern-day doomsayers is a masterpiece ("The Dystopians," Jan. 26). But he missed an opportunity to poke even more fun at gloomster Dmitry Orlov. This opportunity arose when Mr. Orlov listed "a worsening foreign-trade deficit" as evidence of America's coming collapse.
Mr. McGrath could have explained that another name for "worsening foreign-trade deficit" is "improving foreign-investment surplus" - meaning, larger inflows of foreign investment funds to America. While more foreign investments in the U.S. might in part reflect Uncle Sam's reckless fiscal policies, foreigners' continued willingness to lend so much means that they voluntarily shoulder a good deal of the risks created by these policies. This fact both makes America stronger than it would be without "a worsening foreign-trade deficit" and it signals that foreign lenders emphatically reject Mr. Orlov's belief that the United States' economic destruction is imminent.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Editor, The New Yorker
Dear Editor:
Ben McGrath's report on modern-day doomsayers is a masterpiece ("The Dystopians," Jan. 26). But he missed an opportunity to poke even more fun at gloomster Dmitry Orlov. This opportunity arose when Mr. Orlov listed "a worsening foreign-trade deficit" as evidence of America's coming collapse.
Mr. McGrath could have explained that another name for "worsening foreign-trade deficit" is "improving foreign-investment surplus" - meaning, larger inflows of foreign investment funds to America. While more foreign investments in the U.S. might in part reflect Uncle Sam's reckless fiscal policies, foreigners' continued willingness to lend so much means that they voluntarily shoulder a good deal of the risks created by these policies. This fact both makes America stronger than it would be without "a worsening foreign-trade deficit" and it signals that foreign lenders emphatically reject Mr. Orlov's belief that the United States' economic destruction is imminent.
Sincerely,
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University
Posted by Don Boudreaux on
Thursday July 2, 2009 at 7:48am