I am not yet convinced of the soundness of our economic approach to South Asia. We are in a radically bad trade situation with India. I believe their enormous profits are the reason that the Indians are engaging with us rather than any sudden finding of common values. Our trade deficit with India is spiralling out of control; it was $8 billion last year, and if it continues at the pace it has gone through the first five months of the year, it will reach $10 billion this year, a 25% increase. While that doesn't equal even one month of China's recent mammoth trade surpluses with us -- at the rate that it is ballooning, we will be more than $130 billion in the red with the red monster -- we just don't need another $10 billion (and growing) deficit on top of that.
Yes, by playing economic patsy for India and having IndiaPac purchase our congress wholesale, we can make them feel pretty daggone good about themselves, but I cannot rate it as an intelligent on our part.
If we just sent them a check for $5 billion each year, it would cost us far less -- and we would have more of a taxbase of taxpayers working at jobs that instead have been outsourced to India. And I personally would just as soon as have all of our accounting work done by U.S. CPAs rather than all of our personal tax information headed off to the subcontinent; all of our bank and securities work done by folks in the U.S.; and all of our medical records just as soon kept here. But economically, it does make a lot more sense for any one company to minimize its expenses and maximize its profits; it's just that when we ship those dollars overseas, they don't come back just as quickly; they instead turn into a huge debt which we have to service into perpetuity. And if we start to inflate the currency, interest rates will follow, making that servicing even more onerous.