The reason this is important is because we are sending more of our wealth overseas than we are collecting from overseas. A current account deficit is not necessarily bad or good, but may be bad if it exists for the wrong reasons.
From the IMF: If the deficit reflects an excess of imports over exports, it may be indicative of competitiveness problems, but because the current account deficit also implies an excess of investment over savings, it could equally be pointing to a highly productive, growing economy. If the deficit reflects low savings rather than high investment, it could be caused by reckless fiscal policy or a consumption binge.
AIMI believes our U.S. trade deficit is due to high consumption and low exports of goods and services. These underlying reasons for our annual trade deficit do not serve our country very well. It means we are not competitive. We believe the U.S. needs a larger manufacturing base, owned by U.S. shareholders. The larger manufacturing base will also provide higher wage jobs for the people of our country.
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