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percentage points within a decade. h is might not sound like much,
and the results come with many caveats, but regardless, the numbers
are big: the payof that Ahn predicts works out to more than $300
billion every year.
And there's still one more economic benei t to tally up. For many
years, Americans have worried that they import far more than they
export; in economic jargon, the United States has a big current account
dei cit. (Technically, the dif erence between imports and exports
is known as the trade dei cit, but for the United States the dif er-
ence between that and the current account dei cit is small and ot en
neglected.) Economists have long debated whether this is a signii cant
problem. Some see it as a sign that the United States is an at ractive
place in which to invest. Others fear that big current account dei cits
could collapse through a plunge in the U.S. dollar, or that big current
account dei cits sustain the sort of cheap credit that fueled the i nancial
crisis only a few years back.
Oil imports superi cially look like a big culprit behind the U.S.
current account dei cit. In recent years, the tab for imported oil has
ot en accounted for more than half of the current account imbalance.
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Producing far more oil at home, then, would seem to go a long way
toward i xing the problem.
h is is one of the few advantages from domestic oil that oil-production
skeptics tend to concede. In fact, they'd be on i rmer ground question-
ing this claim than many of the others they at ack. Economists have
long believed that, in the long run, current account dei cits have a
straightforward explanation: Americans consume more than they pro-
duce, so they need to rely on imports to make up the dif erence. h e
result is a current account dei cit. h e thing about oil production is
that it has two consequences. h e i rst, of course, is an increase in
U.S. output. But because that makes Americans richer, it drives their
spending up as well. h e two ef ects should cancel out over the long
haul; there's no reason to believe more oil production will make any
sustained long-term dif erence to the U.S. current account. (Still not
sure? h en consider this: there are plenty of countries with massive
oil import bills that have big current account surpluses. Germany is a
great example. So is China.)
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