America’s giant trade deficit, which was $566 billion in 2017, is a major issue that the country should work to fix, infers Kimberly Amadeo of The Balance. The US continuously assumes more debt with the assumption that it will be able to pay it all back. This is unsustainable and highly risky in the long term. If debtors were to unanimously ask for their money back, America would have a huge problem. It also makes the US economy less competitive. Buying more goods than the ones it sells means that certain American industries and jobs are gradually outsourced. This is bad for the country and lowers its standard of living.
The trade deficit is not as terrible for the US as some politicians present it as, claims Adam Brandon of Investor’s Business Daily. GDP, the unemployment rate and wage levels are much better indicators of a country’s economic health, for example. Trade isn’t a zero-sum game, it’s mutually beneficial. Similar to a customer buying something at a store, countries exchange products with each other. It’s also not countries that trade with each other, but private businesses within them. Forcing the trade deficit down makes for economically damaging policy. There are far better ways to create growth.