ECONOMICS REPORT - Current Account Deficit

ECONOMICS REPORT - Current Account Deficit¹
By Mario Ritter

Broadcast: Friday, March 19, 2004

This is Bob Doughty² with the VOA Special English Economics Report.

The United States recently reported a record deficit in its current account balance. The current account is a measure of the nation's trade with other countries. Last year, America's combined deficit on trade in goods, services and other economic activity rose to almost five-hundred-forty-two-thousand-million dollars. That is nearly thirteen percent more than the record current account deficit set in two-thousand-two.

A deficit is often described as a shortage. This is true for the financial situation of an individual. For example, if you spend more than your earn, you must borrow from a creditor³.

However, economists⁴ see deficits⁵ differently. When money is taken away in one place, it becomes a credit someplace else. It all must balance. This does not mean that deficits are good necessarily. It just means that a deficit shows that another economic activity is increasing.

In two-thousand-three, the United States had a huge trade deficit in goods. It had a moderate trade surplus in services of about sixty-thousand-million dollars. But, the question remains⁶, how did the United States pay for everything it bought?

The answer is that the United States paid in dollars. Other countries, then, accepted those dollars. They could then use the money to buy American goods, or they could buy American investments.

That is what has happened since the United States developed large trade deficits in the nineteen-eighties. Countries that trade with the United States have increasingly invested in it. This foreign investment is recorded in the nation's financial account.

Last year, other countries invested five-hundred-seventy-nine-thousand-million dollars more in America than it invested in them. That investment surplus is greater than the trade deficit.

Foreign investment has become an important part of economic development in the United States. In nineteen-ninety-three, foreign money represented about nine-percent of all investment activity in America. By two-thousand, that had grown to almost twenty-five percent.

So does this mean that trade deficits are cancelled out by foreign investment? The short answer is no. The widest measure of investment flow in and out of the country is called the capital account. It shows that the United States has a deficit of three-thousand-million dollars.

This VOA Special English Economics Report was written by Mario Ritter. This is Bob Doughty.

1 deficit   

n.亏空，亏损；赤字，逆差

参考例句：

• The directors have reported a deficit of 2.5 million dollars.董事们报告赤字为250万美元。
• We have a great deficit this year.我们今年有很大亏损。

2 doughty   

adj.勇猛的，坚强的

参考例句：

• Most of successful men have the characteristics of contumacy and doughty.绝大多数成功人士都有共同的特质：脾气倔强，性格刚强。
• The doughty old man battled his illness with fierce determination.坚强的老人用巨大毅力与疾病作斗争。

3 creditor   

n.债仅人，债主，贷方

参考例句：

• The boss assigned his car to his creditor.那工头把自己的小汽车让与了债权人。
• I had to run away from my creditor whom I made a usurious loan.我借了高利贷不得不四处躲债。

4 economists   

n.经济学家，经济专家( economist的名词复数 )

参考例句：

• The sudden rise in share prices has confounded economists. 股价的突然上涨使经济学家大惑不解。
• Foreign bankers and economists cautiously welcomed the minister's initiative. 外国银行家和经济学家对部长的倡议反应谨慎。 来自《简明英汉词典》

5 deficits   

n.不足额( deficit的名词复数 )；赤字；亏空；亏损

参考例句：

• The Ministry of Finance consistently overestimated its budget deficits. 财政部一贯高估预算赤字。 来自《简明英汉词典》
• Many of the world's farmers are also incurring economic deficits. 世界上许多农民还在遭受经济上的亏损。 来自辞典例句

6 remains   

n.剩余物，残留物；遗体，遗迹

参考例句：

• He ate the remains of food hungrily.他狼吞虎咽地吃剩余的食物。
• The remains of the meal were fed to the dog.残羹剩饭喂狗了。