Tuesday, January 13, 2009
U.S. Trade Gap Narrows to 5-Year Low on Import Slump
According to the debt-doomsday crowd we should all feel a lot better now that the trade deficit has been cut in half. So how come things feel a lot worse?
The trade deficit was never a reflection of the health or vitality of the U.S. economy. Rather, it was a function of economic policy engaged in by U.S. trading partners and the fact that the dollar was held as the world's reserve currency. Both were major factors that drove the trade deficit.