Re: Question for Economists
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In theory it's a bad thing because wealth is flowing out of the country, more is being consummed than produced. Some will say that the savings rate in the U.S. is not as bad as it might seem since many own assets that have appreciated alot most notably real estate and that the equity that they've built up isn't reflected in the savings rate.
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This doesn't sound too bad to me, especially given the gov't ability to print up more dollar bills and give them to itself. What's the trade deficit relative to monetary inflation?
If money represents stored wealth (although not directly with fiat currency), then wealth flows both ways, and whether our trade status is deficit or surplus seems irrelevant. If Americans are buying more foreign products than selling domestic products abroad, ... so what? Is there some end-of-the-road nightmare scenario waiting here?
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