That's what their news story on the prospect of a recovery tells readers. The headline, which accurately reflects the article's content, tells readers, "Economy's Fate Hinges on Shoppers' Stamina." Well, it ain't necessarily so. The alternative path to a recovery, which is almost certainly far superior from the standpoint of the economy's long-run health, is to have the growth in net exports lift the economy out of recession. This would slow the rate at which the country accumulates foreign debt. (Given the Post's obsession with the budget deficit, it is remarkable that no one there seems to have heard of the foreign debt. It's basically the same argument, except the trade deficit is almost twice the size of the budget deficit.) If people begin saving more for retirement, which they will have to do if they are to have any wealth other than Social Security, given the loss of home equity, then we will have to look to net exports, rather than higher consumption to boost the economy. The Post should be making this fact clear to readers. It should also point out that the only realistic way to reduce the trade deficit is to lower the value of the dollar.
--Dean Baker
