Question for Economists

[FishHooks]

Our trade deficit isn't bad at all, our country doesn't rely on exports to full the economy the U.S citizens fuel the economy. We have less manafacturing jobs, which produce the things we import, some might say that's bad, but I dissagree, we are becoming much more advanced and dont need those kinds of jobs, which is why we have a premium on education in this country.

WE have just as much invested in China as they do in our contry it evens out, there is no real fear unless something durastic happens, of course we dont want other countries buying up everything in the US of course that would be bad, but many countries having a peice of the pie is great.

[lehighguy]

It really is though. When bubbles burst they tend to have drastic effects on economies. The effect this bubble will have on interest rates could easily cause a recession/depression in America.

Even massive surpluses cause problems. Japan has been in a 15 year recession following its trade bubble in the 80s.

There needs to be a balance in the international capital markets to avoid these problems. That requires more mature fiscal, capital, and financial policies in pretty much every nation.

[FishHooks]

What kind of bubble are you talking about?

I think this is just a case of fear, like the housing bubble, many economists agree prices will drop but nothing durastic will happen, I'm not 100% sure what bubble your talking about (we talked out trade deficit and foreign investing) but usually people get overly afraid.

[lehighguy]

5% of GDP is very high for a trade deficiet historically speaking. It's where you start to have problems. It isn't sustainable.

All industrialized nations, the US included, really need to take a look at thier financial policies. It would be helpful if the rest of the world showed some more consumer demand and it would also help if the US saved more.