[The Great Yazoo]

Those who disagree need only look to Germany — a country that protects low-value jobs and runs a current-account surplus. Labor laws there repulse worldwide capital, thus cultivating a 12.4 percent rate of unemployment. The latter insures a continued trade surplus for Germany, but only because a capital deficit makes German citizens weak consumers.

[Jibaholic]

To all the chicken littles who are upset about the trade deficit, I'll send you another copy of the memo since you didn't get the first one:

We got rid of the gold standard 70 years ago. Wealth is not leaving the country. All you can do with those dollars is either invest them in America or buy American goods and services. Otherwise foreigners are giving us cars, consumer electronics and sneakers in return for little piecs of paper with pictures of dead presidents on them.

[MacDorcha]

In other words, the same reason we have this downward spike right now, is the same reason we had one at the turn of the century. We're getting rid of old jobs, and people are transitioning into the modern market.

Like a drop in speed when you change gears.

Of course, we all already knew that ups and downs are part of what makes our system work (if it were all up, it'd be inflations) But now I have a useful metaphor :)

[vabeachrepub]

I think it Walter Williams who said "you probably have a trade deficit with your local grocery store - how can this imbalance be maintained?" in what was a great commentary on how the trade deficit "problem" is overblown.

thanks for the great post.