The MSM and propaganda (a continuing series, of course)

Today's sample is how Reuters is reporting the trade deficit.

From their "news" item:

WASHINGTON (Reuters) - The U.S. current account deficit widened more than expected in the fourth quarter to a record $187.9 billion, and the current account deficit grew 25 percent for the year as a whole, a government report showed on Wednesday.

Again, there's no correcting for inflation, so we can't be sure whether this is a "record" or not, but the main point is that they report this as an accumulation of "debt".

The problem with that is there isn't any debt! The "balance of trade" measures what is consumed within the United States versus that consumed outside of the United States. A "deficit" simply means that more foreign-based goods and services are being consumed than those sourced within the United States. This may or may not be a good/bad thing.

For example, I'm sure almost everyone has a "trade deficit" with the grocery store, barber, newspaper company, etc. because we consumer more in goods and services from those places than they do from us. Is that a bad thing? Not at all. In addition, the inbalance of trade does not indebt us to anyone!

Reuters gets to their major propaganda a bit further down in the story:

The yawning trade gap renewed worries that the massive borrowing necessary to finance the U.S. deficit might not be sustainable.

There isn't a single thing in that statement that is a fact.

First, the U.S. deficit, at about 3.5% of GDP, does not require "massive" borrowing. Secondly, it does not require foreign investors. Foreign investors are simply (at this points) more willing to buy US government bonds than other investors. If they "left the table", other investors would step in. That might result in higher interest rates. Maybe. However, in no way can one conclude that there simply would not be demand for government bonds if foreign investors went away.

It is simply a scare tactic designed to try and make the administration look bad.

The funny thing is, a bit further down in the article Reuters reports that the exact opposite of their scare scenario is happening:

Prices on the benchmark 10-year Treasury note firmed slightly and its yield dipped to 4.49 percent from 4.55 percent, primarily on the GM warning, as investors sought a safe haven.

Gee, didn't Reuters just wring their hands and claim that the price of borrowing was going to increase? Yes, yes they did.

That is not the end of the hand-wringing, either. Reuters gloomily reports on the "fall" of the dollar:

Concerns about the U.S. current account have contributed to the dollar's three-year decline against the euro and a basket of major currencies. Some economists have warned of the potential for a steep dollar drop if foreigners' appetite for U.S. assets wanes.

Of course, the further the dollar "falls", the cheaper our goods become relative to foreign made goods, which means we will sell more of our goods to foreigners and buy fewer of their goods and...(drum roll)...the trade deficit will get smaller.

Aren't you glad you have Reuters to "filter" the news for you?