The TPP: Toward Absolutist Capitalism

[Hoyt]

30. Sounds like Econ 101 or Remedial level. Actually, Economists vary as to opinion on whether trade

deficit are good or bad:

Take this view of the good (you can look at the article to get the bad view, because I'm sure that's all you really want to see to continue trashing trade agreements):

". . . . . .Economists who consider trade deficits good associate them with positive economic developments, specifically, higher levels of income, consumer confidence, and investment. They argue that trade deficits enable the United States to import capital to finance investment in productive capacity. Far from hurting employment, they believe that trade deficits financed by foreign investment in the United States help to boost U.S. employment.

Some economists see trade deficits as mere expressions of consumer preferences and as immaterial. These economists typically equate economic well being with rising consumption. If consumers want imported food, clothing, and cars, why shouldn't they buy them? That range of choices is part of a successful economy.

Perhaps the best view of trade deficits is the balanced view. If a trade deficit represents borrowing to finance current consumption rather than long-term investment, or results from inflationary pressure, or erodes U.S. employment, then it's bad. If a trade deficit fosters borrowing to finance long-term investment or reflects rising incomes, confidence, and investment—and doesn't hurt employment—then it's good. If a trade deficit merely expresses consumer preferences rather than these phenomena, it is immaterial."

Read more: International Finance: Trade Deficits: Bad or Good? http://www.infoplease.com/cig/economics/trade-deficits-bad-good.html#ixzz3YRT42haY