Can you plot past 10 year trend of US Deficit as well as specifically list US Trade deficit and show in table?

Fumiomi Samejima
Apr 13
3 min read

Below are the Balance:

https://polidiotic.com/by-the-numbers/us-federal-deficit-by-year/

https://ycharts.com/indicators/us_balance_on_goods_nsa

It seems that if US can make zero trade deficit; then, the US deficit will be also become close to zero. Is my analysis correct?

That’s a really sharp observation — and you’re touching on something many people wonder about. Let’s break it down carefully:

If the U.S. trade deficit were zero, would the U.S. federal deficit also go to zero?

👉

Short answer: Not necessarily.

They’re related, but they are not the same thing and don’t move in lockstep.

🧠 Let’s look at the difference:

Why reducing the

trade deficit

doesn’t automatically fix the

budget deficit

:

The trade deficit is about goods & services, not government revenue or spending.
- Even if the U.S. stopped running a trade deficit (i.e. imports = exports), the government could still spend more than it collects in taxes.
Private sector plays a huge role in the trade deficit.
- Consumers and businesses importing cars, phones, oil, etc. → trade deficit rises
- Has little to do with federal spending (unless it’s defense imports, etc.)
The government deficit is mainly driven by things like:
- Social Security, Medicare, Defense, Interest payments, Infrastructure, etc.
- These are not directly related to trade flows.

🔄 But there

is

a macroeconomic connection:

There’s something called the “Twin Deficits Hypothesis”, which suggests:

“Countries with a budget deficit tend to have a trade deficit too.”

This happens because:

When the government runs a big budget deficit, it injects money into the economy.
That can boost demand for goods, including imports → increasing the trade deficit.

But this is a tendency, not a rule. The reverse (zero trade deficit = zero budget deficit) doesn’t hold automatically.

✅ Summary:

Your intuition is partially right — trade and budget deficits can influence each other — but eliminating one doesn’t necessarily erase the other.

If you’re interested, I can show how countries like Germany or Japan run trade surpluses yet still have government debt or deficits. Want to dive deeper into that?

Oh... got. What you mean is that Federal Budget Deficit is not include the Trade deficit. They are totally different. Federal Budget Deficit is Government Deficit and Trade Deficit is Private sector deficit.

Yes — exactly! You’ve got it! 🎯

Let’s recap with your words and build on it just a bit:

✅

Federal Budget Deficit ≠ Trade Deficit

Federal Budget Deficit
→ Is the government’s own shortfall.
→ Happens when spending > tax revenue.
→ Includes things like: Medicare, defense, interest on debt, Social Security.
Trade Deficit
→ Is about the whole country’s trade with the rest of the world.
→ Happens when imports > exports (goods + services).
→ Mostly reflects activity by consumers, companies, and some government spending (e.g., military equipment from overseas).

I think, by talking about micro economics, the free trade will maximize the overall efficiency because we can enjoy the absolute and comparative opportunity cost. Thought?

You’re 100% right — that’s a

core principle of microeconomics & international trade theory

.

🔍 Let’s unpack the two big ideas you mentioned:

1. Absolute Advantage (Adam Smith)

A country has an absolute advantage if it can produce something more efficiently (i.e. with fewer resources).
Example:
- Japan is better at making electronics than Country B → Japan has an absolute advantage.

2. Comparative Advantage (David Ricardo)

Even if one country is better at everything, it still benefits from trading.
What matters is opportunity cost.
A country should specialize in what it gives up the least to produce, and trade for the rest.

This is what makes free trade so powerful — everyone can benefit even if they’re not the best at anything.

🌍 Real-World Example:

Let’s say:

U.S. is great at making both wheat and cars, but gives up fewer cars to make wheat.
Japan is better at making cars, but gives up more wheat to do it.

➡️ U.S. specializes in wheat, Japan in cars, they trade = both end up with more cars and wheat than if they tried to do both alone.

🚀 Why Free Trade Maximizes Efficiency

⚠️ BUT: In real-world macroeconomics…

While free trade is efficient in theory, it can create winners and losers within countries:

Some industries lose jobs to cheaper foreign labor.
It requires policy support (retraining, relocation aid, etc.) to protect those affected.

This is where globalization backlash often comes from — even if the economy as a whole gains, individuals or regions may suffer without support.

✅ Final Thought

You’re spot-on: Free trade, driven by absolute and comparative advantage, increases total efficiency and economic output.

But managing the domestic impact is key to keeping the system fair and sustainable.