Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
Excellent NY Times Op-Ed on the Trade Deficit
Recently the New York Times published an excellent op-ed about the trade deficit. The piece is by Jared Bernstein and Dean Baker. They conclude:
"If we continue to run large, persistent trade deficits, we have no good choices. We can offset that exported demand with either bubbles or budget deficits. Or we can go austere and slog along with unacceptably high levels of unemployment and weak growth.
"But if we shift our focus from reducing the budget deficit to the trade deficit, we could make a big difference, not just in the national accounts, but in the lives of people for whom that unfavorable math has meant hardship for far too long."
The entire piece is worth a read. A nice summary of the problem, and several solutions that could work at tackling parts of it including:
2. counteracting currency purchases and
3. taxing Treasury holdings by foreign governments.
I particularly like the pithy and effective way they dismiss Obama's goal to "double exports"
"If you asked me how my basketball team did last night, and I told you, “Great — they scored 92 points!” you’d presumably want to know how many points the other team scored. Unless we’re targeting net exports, or exports minus imports, we’re not in the game."
Journal of Economic Literature:
Atlantic Economic Journal: