One thing worries me about the massive stimulus plan being prepared by Congress for Barack Obama’s signature when he takes office: There’s a hole in the bucket, and it doesn’t matter how much water you pour into it, the bucket will never be full.

Simply put, the hole is “free trade.” Here’s one scenario: The stimulus plan includes rebuilding bridges, fixing roads, erecting new schools, and so on. Of course these projects will create jobs. And, of course, every person employed in these projects will need goods and services, so these jobs will create more jobs. But will the ancillary jobs remain in America?

I think many of the new jobs will be created abroad. Why? Because most of the things Americans buy are made, farmed or mined in foreign lands. The bulldozer driver who gets a job building a road in America will spend most of his (or her) pay on shoes and clothes, and even fish, from China, on tomatoes grown in Mexico, on gas refined from Canadian or Saudi Arabian oil… The fuel that provides his (or her) electricity and home heating will come from abroad. He (or she) might buy a new car, assembled in America from parts that are mostly manufactured across the ocean (whether the car is a domestic or foreign brand). When he (or she) takes a vacation he (or she) will likely head overseas, and when he (or she) gets sick, the medicine prescribed will probably be made in a faraway land. Even the rent paid by the bulldozer operator will probably end up overseas as the landlord is likely to spend most of it on imported goods.

I know that America produces a lot of beef and pork and wheat and corn and potatoes and soy beans and… But for the first time in history Americans are importing more food than they export. And I know that America exports a lot of other stuff, too, but not enough. Just look at the trade deficit. As I write this, it’s racing toward $4.8 trillion – at a pace of about $60 million a month.

Now, I want to be fair and balanced, so I have to tell you that some eminent economists think trade deficits don’t matter. These economists say the currency of a country that exports more than it imports tends to rise in value, eventually reducing exports; and the currency of a country that imports more than it exports declines in value, eventually increasing exports. (Someone should tell that to China, which has kept its currency artificially low for years.) I also have to concede that foreign countries invest heavily in American stocks and bonds, so the money sent abroad tends to come back in one way or another. But since interest must be paid on these investments, I don’t see that as a plus in the long run.

I know President-elect Obama and his advisers can see the hole in the bucket better than I can, and I am confident they are figuring out a way to plug it. But it won’t be easy. The obvious answer is to create new industries in which America will lead the world. This would generate a massive increase in exports. One new industry could be based on alternative energy – wind and solar power, biofuels, and so on. But that kind of initiative takes time to research and develop, a lot more time than paving a road or repairing a crumbling bridge. Will Americans have the patience for such a task?