The trade deficit cannot be fixed by forcing a weak dollar policy in the hopes of selling more exports, because over 50% of our trade deficit is related to petroleum. Any slump in the dollar will push up what we pay for oil, canceling out any increase in exports we might hope for.
We are already an import-dependent nation, so any debasement of our currency amplifies the costs of what we're already hooked on ( imports ) more than it amplifies the appeal of whatever products we still export.
Trade deficits are only broken one way: through tariffs and other protectionist measures.
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Sunday, February 28, 2010
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