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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

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



To: chomolungma who wrote (69899)4/22/2003 5:15:46 PM
From: XBrit  Read Replies (1) | Respond to of 70976
 
<<There will be plenty of demand as the U.S. takes up slack and moves back toward full employment.>>

That would be nice.

You have a view and I have a view, and they are different. But they are strongly-held and apparently well-informed on both sides. So I'm not sure there's much point continuing with this topic.

By maybe mid-2005 (after the election distortions have worn off), it should be clear whose vision is closer to reality.


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