- T exports to France a shipment of cotton valued at $200,000. Shipping costs amounted to $80,000, and the shipment sells in France for $320,000 making a $40,000 profit.
- T spends his $320,000 purchasing French goods which he ships back to the United States at a cost of $32,000 (bringing the total cost of the shipment to $352,000) He is able to sell this locally for $422,400 realizing a $70,400 profit.
Some time later, T sent another shipment of $200,000 worth of cotton to France, but the vessel carrying it sank, resulting in a loss of $200,000 for T. From the point of view of the U.S. customhouse however, they recorded exports of $200,000 and no imports, resulting in a $200,000 trade gain.
Clearly, this example shows the way forward for us to rectify our trade deficit in very short order. The United States should:
"...after entering entering into the custom-house her articles for exportation, cause them to be thrown into the sea. By this course her exportations can speedily be made equal to her capital; importations will be nothing, and our gain will be, all which the ocean will have swallowed up." -- from "Sophismes Econimiques" by Frederic BastiatI pity the fool country which follows that course...