While the United States has been running a trade deficit in manufacturing for more than three decades, it grew considerably worse after 2000.

During the ensuing decade, the United States accumulated an aggregate negative trade balance of $5.5 trillion, and in five of those years, the deficit topped $600 billion.

To put this in perspective, during each of those five years, on average, each American household imported $5,450 in goods and services that was not matched by equivalent exports. In other words, over five years every American household got the equivalent of a new BMW essentially on credit, since we were not exporting an equivalent amount.

Many Americans comfort themselves by thinking that the vast majority of the U.S. trade deficit in goods is comprised of oil, cheap low-value items, or the mass-market consumer electronics. Surely, the United States must run a trade surplus in advanced technology products from industries such as life sciences, medical devices, optoelectronics, IT, aerospace, and nuclear power.

But in the ten-year period from the beginning of 20002 to the end of 2011, United States ran a trade deficit in advanced technology products of $526 billion deficit.

But despite these trends, policy makers are strangely silent on the issue. While we might hear about the benefits of exports, there are no hearings on the trade deficit or speeches about how to cut it.

One principal reason is that most economists advise policymakers that the trade deficit is not a problem. According to them, if other nations want to sell us products without us selling them anything in return, they are doing us a favor. If they want to give us computers, cars, and clothes without giving anything in return other than “promissory notes” we should sit back and enjoy driving that BMW we got without Americans having to work for it.

This advice is misguided on several accounts. First, large trade deficits have led to a hollowing out of U.S. manufacturing and been a major factor in the continued stagnation of the economy as a whole.