What's to Blame for Half the U.S. Trade Deficit

Give up yet? It's your car.  

Today we're shipping to the printer (among other things) a feature I wrote for the January/February 2011 issue called "Beyond Oil in 20 Years: Here's How to Get There." Too late for inclusion comes this great chart (courtesty Matt Yglesias) from the finance and economics blog Calculated Risk. It shows the U.S. trade deficit: blue is the total deficit, red is the trade deficit without petroleum products, and black is petroleum alone. (You can click for a larger version.)

 
As Yglesias notes,

America is a much more oil-dependent country than other places are. We have more anti-density regulations, more subsidization of big houses, less taxation of gasoline, less investment in mass transit, etc. than most developed countries. This isn’t really a coincidence. The United States was a net oil exporter in the late-1940s. So we had a postwar industrial policy paradigm built around suburbanization and powerful firms in the oil and automobile sectors. The problem is that we’re not a net oil exporter anymore by a long shot. But we still have a policy paradigm build around encouraging lavish consumption of gasoline. Under the circumstances, we’d have to run a really enormous surplus in goods and services to cover the oil gap.

Of course, we could also ween ourselves off of oil. While you're waiting for the new Sierra, you can study up on the issue here.

--Paul Rauber