The Other Deficit

Here, Kevin Drum laments that even if we balanced the fiscal deficit, we'd still be running a massive trade deficit, making it basically impossible to ever pay off our loans we owe other nations:

Our trade deficit is half what it was at its peak. The problem is that this isn't nearly enough: eventually, we need to pay down all these loans. That means we need to start running a trade surplus, not merely a smaller deficit. And we have to do this even though oil prices are almost certain to rise in the long term and our dependence on foreign oil is going to continue to grow. I still haven't figured out how this is going to happen, and as near as I can tell, neither has anyone else. All the options seem pretty grim, though.

In essence, we need to start making things cheaper than China so they buy from us or we're doomed.

Or are we? I propose the following solution: we must invent sweet new technologies and we must do so immediately. First and foremost, I think we need to start building and testing fusion reactors. Fusion energy is emerging as a very real possibility, and the first to market with sellable fusion reactor technology will stand to profit. And a fusion reactor isn't a $0.25 toy, where you have to sell trillions of them to stand to effect the trade deficit. Fusion reactors could be $3-5 billion a piece, and emerging countries like China and Inda have that money, and would be willing to pay.


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