it's not called the dismal science for nothing

While economists fret that the U.S. economy may be sliding into a bit of a trough or worse, they do see one bright point in the rise in exports, created in large part by the weakness of the dollar.

As a non-economist, I see that trend as ironic. Our exports are up because the dollar is weak, and the dollar is weak, in part, because we import so much. Oh, I know that it's more complicated than that, with the federal deficit and the broader current-account balance involved.

I've been thinking a lot about international economics lately. (I know, I know. That's not the sort of thing that makes people flock to your corner at holiday parties.) And whatever thinking I've done has not gotten me very far toward understanding the complexities of an economy that many experts consider at serious risk.

The outlook may not be entirely bleak, but it is hardly bullish. Global Insight's chief economist, Nariman Behravesh, does not expect the United States to slip into recession, but he concedes that it's far from impossible. (See our story on the 2008 economic outlook.)

A couple of factors make it crucial, I believe, for anyone in business to think about these big economic issues. While these factors seem far removed from our everyday lives and are certainly far removed from any levers most of us are able to pull, what happens on a global scale affects everyone's paycheck, job security, savings account, and overall financial well-being.

Take this whole issue of the current-account deficit, of which the trade imbalance is a part. It has gotten plenty of ink lately. It is also incredibly complex. From everything I've read or heard from economists, it also could cause great damage to the U.S. economy. The current account, as briefly defined by the U.S. Bureau of Economic Analysis, is "the broadest measure of U.S. international trade in goods and services, receipts and payments of income, and net unilateral current transfers." According to the bureau, that deficit in 2006 was $856.7 billion. That's 6.5 percent of gross domestic product (GDP), according to a policy brief published last March by the Washington-based Peterson Institute for International Economics.

The deficit for 2007 will be smaller when we see final numbers in March, largely as a result of the growth in exports. But it will still be sizable. And most economists argue that such large deficits cannot continue indefinitely. They tell us that as U.S. foreign liabilities continue to grow, foreign investors will demand a greater return on the assets they hold.

In its policy brief last March, the Peterson Institute warned against relying on market forces alone to address the issue."Market sentiment can change abruptly and the risk of a market-led adjustment is that it might involve global recession, abrupt and excessive changes in key exchange rates and asset prices, and as a consequence, aggravated trade frictions. To reduce the risk of such an outcome, policy-makers need to initiate a policy-induced adjustment in the near future," the authors wrote. The market is always at work, of course, as the weakness of the dollar testifies, so delays by policy-makers essentially amount to betting against the clock.

It's hard to make out what the presidential candidates think about the topic. Their natural caution and the partisan spin they place on economic data make them unreliable prognosticators. Current-account deficits don't make for good sound bites or engrossing debate topics. But the issue will demand significant leadership and perhaps political courage from whoever occupies the White House next year.

So I guess I'll keep thinking about economics for a while. As depressing as that can be.