Quoting ‘Debunking the Belief that Imports and Trade Deficits Are a ‘Drag on Growth”

Contrary to the prevailing view, imports are not a “leakage” of demand abroad. In the annual U.S. balance of payments, all transactions balance. The net outflow of dollars to purchase imports over exports are offset each year by a net inflow of foreign capital to purchase U.S. assets. This capital surplus stimulates the U.S. economy while boosting our productive capacity.

via The Trade-Balance Creed: Debunking the Belief that Imports and Trade Deficits Are a "Drag on Growth" | Daniel Griswold | Cato Institute: Trade Policy Analysis.

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One thought on “Quoting ‘Debunking the Belief that Imports and Trade Deficits Are a ‘Drag on Growth””

  1. Various misanthropic and vicious ideologies encourage people to think of themselves as parasites if they consume more than they produce. If nothing else, it makes one ‘insolvent’ and subject to all sorts of abuse on account of that. Some ideologies in that cluster say national budgets, like household budgets, should be in the black, so all countries must produce more than they consume. And all the children are above average. Sometimes life really is a zero-sum game. The more frank and honest of the ideologies of that type are overtly social darwinist–some people are just meant to be road kill.

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