By the end of last year, foreign investors held $1.7
trillion in US stocks, $1.2 trillion each in corporate debt and
treasury obligations - 12 percent, 24 percent, and 42 percent of the
outstanding quantities of these securities, respectively.
The November 2000 report of the Trade Deficit Review Commission,
appointed by Congress in 1998, concluded that America's persistent
trade deficit was brought on by - as Cato Institute's Daniel Griswold
summarizes it - "high trade barriers abroad, predatory import pricing,
declining competitiveness of core U.S. industries and low wages and
poor working conditions in less-developed countries (as well as low)
levels of national savings, (high rates of) investment, and economic
growth - and exchange rate movements."
Griswold noted, though, that "during years of rising deficits, the
growth of real GDP (in the USA) averaged 3.5% per year, compared to
2.6% during years of shrinking deficits ... the unemployment rate has,
on average, fallen by 0.4% (compared to a similar rise) ...
manufacturing output grew an average of 4.6% a year ... (compared to
an) average growth rate of one
percent ... poverty rate fell an average of 0.2% from the year before
.
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