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CHUCK ROGÉR: WHY WORRY OVER THE ‘TRADE DEFICIT’? |
Jingoists push the notion that America must grow exports faster than imports. These preachers preach that importing more than we export is somehow bad. But mathematics doesn't lie. Look again at those last two paragraphs. There's a 38% higher correlation between imports and GDP than there is between exports and GDP. The math says this: Go ahead and focus on growing your exports, but when you do, your economy will grow less than if you had let the market run free to produce increased demand which spurs imports. A rising gross domestic product goes along with rising imports--plain and simple. Trade deficit worriers may reject that reality, but reality it is.
In summary, when imports increase, the economy and the job market expand. When imports decrease, the economy goes into recession and employment falls. There is no similarly strong correlation in the case of exports.
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