The Trade Deficit Isn't a Scorecard, and Cutting It Won't Make America Great Again

-Dom Orsini

Recently in the presidential primaries, we hear a lot about how cutting the trade deficit will benefit the country. Trump believes that the US deficit, which is a half-trillion-dollars, makes us inferior to countries with trade surpluses, such as China and Mexico. The articles explains how trade deficits are not necessarily good or bad for the country, and that it all depends on circumstances. It also talks about how if America would decrease it's trade deficit could actually be bad for the US, and give up key levers of power that help America in international politics. It hits points about how even though America owes countries money, those countries are flowing money into the US, such as buying treasury bonds or direct investment, so that their currency stays down and won't effect their export partners. In my opinion, the US dollar having a strong currency, as well as strong control in the global market helps America with controlling the deficit enough to where we, as a nation, can control it and not make it a problem that will not ruin the US economy. This can be made from deals the US makes with other countries, as well as exchanges of other items such as goods or services. Whoever ends up being the next US president will definitely have to rethink their strategy of cutting the trade deficit, because if they're not careful they might end up putting the America economy in a worse place with international trade.


http://www.nytimes.com/2016/03/28/upshot/the-trade-deficit-isnt-a-scorecard-and-cutting-it-wont-make-america-great-again.html?ref=economy&_r=1