In a new paper, Gros argues – compellingly, in my view – that what’s really happening is that foreign companies are understating the profits of their US subsidiaries, probably to avoid taxes, and that official data are, in particular, failing to pick up foreign profits that are reinvested in US operations. If Gros is right, the true position of the United States economy isn’t as bad as you think – it’s worse. The true trade deficit, including unreported profits that accrue to foreign companies, isn’t $800 billion – it’s more than $900 billion. And America’s foreign debt, including the value of foreign-owned businesses, is at least $1 trillion bigger than the official numbers say it is.
For Complete IIPM-Article, Click on IIPM-Editorial Column
Source IIPM-Editorial,2006
For Complete IIPM-Article, Click on IIPM-Editorial Column
Source IIPM-Editorial,2006
