Trade Deficit, Budget Talks Threaten Recession
Cutting the trade deficit by $300 billion, through domestic energy development and conservation and forcing China's hand on protectionism would increase GDP by about $500 billion a year and create at least 5 million jobs.
Longer term, large-trade deficits shift resources from manufacturing and service activities that compete in global markets to domestically focused industries. The former undertake much more R&D and investments in human capital.
Cutting the trade deficit in half would raise U.S. economic growth by one to two percentage points. But for the trade deficits of the Bush and Obama years, U.S. GDP would be 10% to 20% greater than it is today and unemployment and budget deficits not much of a problem.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts