What do the international free traders on this board think about Mr. Buchanan's article here?

http://www.worldnetdaily.com/news/articl...E_ID=54454

http://www.tcsdaily.com/article.aspx?id=021006G

good summary of what Free Traders think about the Trade Deficit.

the biggest trade surpluses in the 1900's were in the 1930's and led to the Great Depression.[/quote]

Buchanan doesn't understand how the economy has changed.

We're a post-industrial society. We largely have other people manufacture stuff for us because they can do it cheaper. It costs us manufacturing jobs. It brings us more of the higher value-added jobs in the services sector (consulting, marketing, management, accounting) and leads to investment that increases technological development and thus and economic productivity -- and more jobs.

The people who lose under this system are people that don't adapt.

You have to adapt. The government should help you do so, but it can't hold back efficiency just because you don't want to or can't adapt.

and to add on to what OuGwave has said as long as the US maintains a competative return on the world investment markets the deficit can theorecticly go on forever.

Tulsaman Wrote:and to add on to what OuGwave has said as long as the US maintains a competative return on the world investment markets the deficit can theorecticly go on forever.

To make one caveat though, I don't think we should run "double deficits" -- both fiscal and current account -- into the future without consequence. At some point the lack of aggregate saving is going to hurt us. Particularly if we happen to see problems in China and a resulting dollar collapse. But thats a different discussion. The larger point is that a trade deficit alone is not a significant problem.

exactly somewhere we have to attempt to run a surplus though it may be difficult as we are a mature economy.