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Trade Deficit: Made in the USA?

Posted By Bryan Riley On May 11, 2011 @ 4:00 pm In Economics | Comments Disabled

The U.S. Bureau of Economic Analysis just announced that the trade deficit for March [1] increased to $48.2 billion.

The federal budget deficit plays a major role in creating U.S. trade deficits. When the government sells Treasury bonds to finance the budget deficit, it competes with U.S. exporters and private borrowers for scarce foreign dollars.

For example, in January the federal government borrowed [2] $46.483 billion from abroad, and the United States ran a trade deficit [3] of $46.969 billion.

Trade deficits are not necessarily a cause for concern. But in this case, they are a symptom of the real problem: massive government budget deficits.

Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org

URL to article: http://blog.heritage.org/2011/05/11/trade-deficit-made-in-the-usa/

URLs in this post:

[1] trade deficit for March: http://www.bea.gov/newsreleases/international/trade/tradnewsrelease.htm

[2] borrowed: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/tressect.txt

[3] trade deficit: http://www.census.gov/foreign-trade/Press-Release/current_press_release/ft900.pdf

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