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Politics : Formerly About Applied Materials

AMAT 275.07

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3:59 PM EST

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To: chomolungma who wrote (69899)	4/22/2003 2:54:57 PM
From: Sun Tzu	Read Replies (1) of 70976

> A decline in the trade deficit will stimulate the U.S. economy... I am afraid it is neither. Trade deficit in and by itself is neither stimulative nor damaging to the economic activity. What matters is the incremental changes to domestic investment. If the deficit drops because we cannot afford to import more, then we are in trouble. But if it drops because of increases in domestic activity, then what you say is true. The deficit is simply a subtraction of two key numbers. It is the change in the magnitude of those two numbers that matters not the deficit itself. ST

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