You can't write about America's fiscal problems without mentioning oil and savings.

The New York Times editorial on Saturday, Before the Fall, is one of the better pieces about America's impending fiscal crisis, but it missed two salient points: America's dependence on foreign oil that drives our trade imbalance and America’s non-existent savings rate.

The article pointed out that America’s trade deficit reached “an unprecedented $666 billion in 2004, a 24 percent increase from the 2003 level…” While our love of cheap toys from China and delicious fruits from Chile has propelled the deficit, nothing has been more damaging than our need for foreign oil. According to the report quoted in the Times, America imported $133 billion of oil in 2004. While the total number of barrels changed little month to month, the value rose throughout the year, thanks to a surge in oil prices to over $50 a barrel, which it is still at today. If oil rises even further, to say $105 a barrel, a figure Goldman Sachs said is possible, then oil imports would triple to $401 billion. Talk about a deficit.

Fredrick M. Alger, III, the founder of Fred Alger Management, wrote an open to letter to the president about this very issue.

The editorial also failed to mention America’s anemic savings rates, which registered at 0.6% of disposable income in February 2005, down from 4.0% just two years ago. Because America, as in the citizens and the government, have increased spending at the expense of saving we are forced to borrow. So if we reverse this habit, i.e. scaled back spending and upped savings, we would not only need to borrow less, but would reduce the trade deficit because much of what we buy comes from overseas. Some would argue this is a bad idea because American consumerism is what drives our economy, and that countries with high-savings, like Japan, often have stagnant economies. This point is valid, which is why I am not calling for a boycott on disposable spending. What I am calling for, though, is a reduction in “check-out line” spending, the unnecessary goods bought out of boredom.