The Computer Manufacturing Industry and the U.S. Balance of Payments

by James Sood



The article focuses on the computer manufacturing industry and the U.S. balance of payments. The U.S. has experienced a persistent balance of payments deficit since the end of World War II. This continuing condition has been financed by a reduction of the U.S. gold supply and by an increase in the debt to foreign residents, banks and governments. From 1946 to 1971, the American gold supply decreased from approximately $20.7 to $10.2 billion, while the U.S. liquid liabilities increased from about $6.5 to $64.2 billion. This represents almost a $70 billion deterioration of the financial position of the U.S. during this period. Despite various attempts by the government to correct or control this situation, the balance of payments deficits have increased dramatically in the last few years. While the concept of special drawing rights has increased the international liquidity of the U.S. as well as the other member nations of the International Monetary Fund, this mechanism only extends the period before corrective or remedial action must be taken.

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