Trade Deficits

Trade Deficits

Trade deficits are being treated as black and white issues these days, but Sen. Toomey nails the absurdity of that view in a Politico article:

“You want to shrink a trade deficit, there’s an easy way to do it: Have a recession.”

Trade Balance = Output – Input, or Trade Balance = Exports – Imports

His point is that we could wipe out all of trade deficits simply by being too poor buy anything from the rest of the world and then we’d have a trade surplus.

Also, we’d have no products.

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