Economic Questions & Answers

As illogical as it may seem, the greater trade deficits become, the greater the economy has expanded. ôThe US economy is doing fine, growing about 4% per annum with good momentum for the months ahead.ö (Kubarych, 2004). The reason for this apparent disparity is that trade deficits are not necessarily the direct result of a poor U.S. economy; in fact, there are a number of more likely causes. The nations we trade with may be suffering under a poor economy that suppresses trade at their end. In some cases, unfair or otherwise imperfect domestic trade practices are at fault. In others, trade is simply not a good deal because rates have been manipulated. According to Daniel T. Griswold of The Globalist, ôWhatever negative impact the deficit may have in the long run, there is no evidence that the U.

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