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[Charon]

In one of your posts in that thread you say:
[ QUOTE ]
In particular, the trade deficit is essentially meaningless, and the national debt is an acceptible % of GDP

[/ QUOTE ]

Can you eleborate on this? I don't know much about economics, but would like to hear your reasoning.

GDP: estimated 11.8 trillion [1]
National deficit: 477 billion (~4,0% of GDP) [2]
National debt: 7,5 trillion (~64% of GDP) [3]
Trade deficit: around 550 billion (~4,7% of GDP) [4]

A national deficit of 4% is higher than most industrialized countries (for instance, the EU countries have agreed on maximum national deficit of 3% of the GDP). The national debt is comparable to that of EU countries (expressed in % of GDP).

Now my reasoning is that a growing trade deficit puts the dollar under further pressure, which would in turn have a negative effect on the future trade deficit. That in combination with an already big national deficit, would weaken the US economy (and the economies of EU countries as well, since they are not helped with a weak dollar and strong Euro).

Am I reasoning in the wrong direction? It just seems to me that the current policy of the US government is not benificial to the economy (although I must add that if the oil prizes would be in Euro's that would have a far greater impact on the US economy).





[1] http://usgovinfo.about.com/gi/dynami...a%2Fglance.htm

[2] http://academic.bellevue.edu/~jpatton/macro/budget.html

[3] http://www.publicdebt.treas.gov/opd/opdpenny.htm

[4] http://www.census.gov/foreign-trade/...ts/annual.html