THE QUARRELING over the next budget is rolling heavily along highly conventional lines, as though nothing counted but the internal condition of the American economy. Americans sometimes resist on principle, as though it were an infringement of sovereignty, the idea that anything abroad might matter. But conditions throughout the rest of the world are going to influence--with great force--the recovery here.
Things haven't always been that way. From World War II until about 10 years ago, the people who made American economic policy could generally afford to ignore the rest of the world. For most of the central decisions that affect jobs and growth, they could afford to treat this huge and prosperous country as though it were an island. The exceptions were obscure matters that could be left to the technicians.
But all that changed with a vengeance in the 1970s. It's important to remember that the oil and currency crises weren't the only forces transforming the economy in those years. Over the past decade, American exports have doubled in proportion to the size of the national economy. Rising exports strongly helped lift American incomes in the 1970s. But if exports are a source of wealth, they are also a point of vulnerability to trends in other countries.
American exports peaked in early 1981 and then began to fall, contributing heavily to the beginning of the current recession a few months later. Since then, the drop in exports has been the equivalent of about 40 percent of the fall in total demand. As that figure suggests, exports aren't the whole explanation of the present troubles. But they are an important part of it, and as long as exports drag, the prospects for steady growth in this country will remain poor.
American exports will pick up only as demand strengthens abroad--and foreigners' demand for American goods will revive only when they are able to earn dollars by selling more of their goods here. It's a rather chicken-and-egg situation. A number of causes and effects have to happen more or less simultaneously. It's not impossible. But it's one prominent reason for thinking that the coming recovery won't be as rapid as most of its predecessors.
New circumstances require new habits of mind. If you want to see where the American unemployment rate is going, you certainly need to consider Mr. Reagan's budget--but you probably would do well to look beyond it. You will find it helpful to keep an eye on events as they affect American exporters' customers in Canada, Germany, Brazil and all the rest.