ich more than likely can’t begin to grow unless the trade deficit changes-an unlikely scenario until economic crises in key international markets (like Asia) begin to improve.
However, many economic indicators like the trade deficit are not always equitable with bad news. This article contends that the trade deficit is actually a good thing for America and the international economy, at least to a degree. This is because if the countries who are sending large amounts of exports to the U.S. did not have America’s lucrative markets to supply their economic situation would deteriorate even more, perhaps creating an international economic banking collapse, “China’s inability to divert some of those lost exports to the U.S. market would surely exacerbate its banking crisis, forcing a banking collapse at worst or a currency devaluation at best. The resulting collateral damage to the Pacific region and to the world’s financial system would be utterly unacceptable” (The Context 1). Further, the openness of American markets offer American consumers a freedom of choice not generally had by most consumers worldwide. In addition, the trade deficit can also help act as a drag on inflation, keeping it at low levels. More foreign capital entering the U.S. also means long-term interest rates will be lower, so the t
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