On Thu, 11 Mar 2004 19:40:37 -0800, "ScottW"
wrote:

Sure, if it helps. If it further damages this fragile economy it will
be counterproductive. Deficits and national debt aren't
short term economic factors.

We need to deal with job loss, trade deficit, and energy costs.
Get those in line and the deficit will be much easier to deal
with.

The trade deficit is always precisely equal to the difference between
national savings and investment. The budget deficit, if household
savings stay the same, will therefore produce a trade deficit. (The
reason the trade deficit persisted in the 90s despite the budget
deficit was because household savings turned negative--people spent
savings as their assets grew.) The huge and growing trade deficit is
the result of the huge and growing budget deficit.

The real question I think is does the growing trade deficit inhibit
job growth. It would seem to be possible, if it means that people are
buying from abroad instead of at home. So there could be a connection
between the growing trade deficit and outsourcing. The parallel was
in the 1980s with the growth of auto and steel imports and the decline
of employment in those sectors. This could take place even if the
economy is growing, if the trade deficit grows as a share of output.

If so, that would mean that the real immediate impact of the budget
deficit is the decline jobs number.

--

Jacob Kramer

On Fri, 12 Mar 2004 18:06:27 GMT, Jacob Kramer
wrote:

(The
reason the trade deficit persisted in the 90s despite the budget
deficit was because household savings turned negative--people spent
savings as their assets grew.)

This should say "despite the budget surplus."

--

Jacob Kramer

"Jacob Kramer" wrote in message
news
On Thu, 11 Mar 2004 19:40:37 -0800, "ScottW"
wrote:

Sure, if it helps. If it further damages this fragile economy it
will
be counterproductive. Deficits and national debt aren't
short term economic factors.

We need to deal with job loss, trade deficit, and energy costs.
Get those in line and the deficit will be much easier to deal
with.

The trade deficit is always precisely equal to the difference between
national savings and investment.

I'd really like to see some proof of this.

This guy disagrees.

http://tinyurl.com/2e8rv

Hope this works as it links to a doc.

ScottW