In most of the world's parliaments, a chief of government who confused a trade deficit with a balance-of-payments deficit -- as President Reagan did at his news conference Tuesday -- would be shown the door, and not very ceremoniously either. Nor would most competently managed companies retain an accountant who took a casual view of the difference between sales and inventory, or billing and cash flow.
As of the last quarter, according to the Department of Commerce, the United States slipped for the first time since World War I into debtor status. That is not the same thing, though the president obviously thought it was, as having a big trade imbalance.
Trade deficits, even big ones, come and go. Balance-of-payments problems tend to be more permanent.
It is true that the welfare of the United States and the political footing of presidents have not usually turned on the distinction. Elsewhere, however, nations both rich and poor know what a balance- of-payments deficit is and why it matters.
Even in Europe, the memory of the bleak payments crises of the years immediately after World War II remains vivid. Those were years when one's currency was threatened by speculation and devaluation; when governments had to squeeze, almost to zero, the amounts of money their citizens could take abroad; when a brigade of bureaucrats from some international agency, usually the IMF, might grimly descend to press for domestic austerity in return for an emergency loan.
From such unpleasantnesses, with their gruesome toll on the everyday standard of living, the United States has been exempt -- especially since the great flow of the world's capital tilted our way during World War I, making us a "creditor nation." Now, ong with other traditional expectations, our accustomed status as the world's premier lender has been blasted away, almost in the twinkling of an eye, by the exploding volume of the U.S. public debt.
So far, the tilt is fairly modest, but the trend is not. Without major action by Congress, or some wholly improbable turn in the economic picture, the United States will soon replace Brazil as the world's top borrower.
We won't feel pain of Brazilian proportions, of course. The dollar remains a much- coveted currency, American investments are still attractive and the United States is not dependent on cruelly fluctuating commodity prices for overseas earnings.
Yet when the world's premier economy, the linchpin of the world trading and financial system, slides into the debtor's role, it is a milestone in history. And consequences do follow.
For one thing, to notice a point of international morality usually dismissed by the green-eyeshade men, the United States has ceased to generate capital for the use of less fortunate or developed areas and is well on the way to being the world's greediest devourer of surplus capital.
That is in itself a remarkable change. It might sit more easily on the national conscience if debtor-nation status reflected need rather than self-indulgence and paralysis of the political will. Unfortunately, it springs from the failure to tax ourselves to pay for the level of government services we demand.
The ethical implications of an economic phenomenon do not interest, or bother, everyone. Even for the hard-bitten, however, there is prudence to consider.
No one can say when (or indeed whether) the binge of deficit spending might undermine overseas confidence and investors might demand much more higher rates of interest as an inducement to finance our debt, or what such changes would do to the U.S. economy or others. Economic prognostication is always tricky and can be rash.
But unless the United States is exempt from the world's common experience and the usual rules of economic prudence, chronic indebtedness will exact its toll sooner or later.
For that reason, if not out of a somewhat loftier vision of the duty and destiny that go with our great good fortune, the lapse of the United States into debtor nation status demands informed attention -- even from Ronald Reagan.