At nearly $600 billion, the trade deficit is almost entirely attributable to the gaps in trade with China and on oil, and it is the single most significant drag on demand, growth and jobs creation.
If elected, Gov. Mitt Romney promises to tackle China's undervalued currency and other mercantilist policies and open up offshore and Alaskan oil reserves for development. These polices could quickly boost demand by cutting the trade deficit in half, create 5 million jobs and get the economy growing again.
Longer term, policies proposed by Romney to lower the trade deficit could profoundly affect the pace of growth, because export and import-competing industries spend at least four times as much on R&D as does the private business sector as a whole.
Cutting the trade deficit in half could easily increase U.S. R&D enough to boost U.S. GDP growth by one or two percentage points. A U.S. economy growing at 3% or 4% a year, instead of its current 2%, would have far more resources to address issues like health care, the solvency of social security, an adequate national defense, and space exploration.
Friday's jobs report offers more than dry numbers. Rather, it will reveal much about the progress accomplished -- and yet unrealized -- toward rehabilitating the economy and creating jobs. With the right policies, the economy can create four or five hundred thousand jobs a month, grow robustly and again offer Americans promising futures.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.