Friday, November 11, 2005
So what's wrong with a trade deficit?
Nothing, points out Don Boudreaux in a superb, pithy post on Cafe Hayek. He writes:
One frequent response to this ridiculous belief that something is amiss if any one country runs a trade deficit or a trade surplus with another country is to ask those who find such situations troubling "Do you shop at supermarkets?" Of course, the answer is yes. Unless the person to whom the question is directed works at a supermarket, the questioner then responds "Don't you realize that you run a persistent trade deficit with your supermarket? You buy lots of things from it and it buys nothing from you!"Quite. Read the full post.