Debate - Balance of Trade
In the wake of the debt crisis starting in Greece and spreading to other Eurozone countries, effectively crippling the European economy and contributing to the world economic fallout as a whole, questions have arisen regarding debts and deficits, consumption and production. For us in the U.S., we recognize that over time, we have become the largest debtor nation in the world largely due to our level of consumption relative to the rest of the world. This is evidenced by a $700 billion annual trade deficit in 2008 that has nearly doubled since 2000. At these kinds of deficit levels, will the U.S. continue to be the economic engine on which the world runs? Will the world eventually lose confidence in the value and longevity of the U.S. dollar, creating a problem for the world economy and stifling international trade for the U.S.? We addressed these questions by focusing on three related, but distinct issues: 1. The Trade Deficit for the U.S. is Not a Long-Term Concern 2. U.S. Government Policy on Foreign and Domestic Oil Stifles U.S. Economic Activity 3. The U.S. Government Should Take Action Against China Who Benefits From Unfair Trade Practices The sections that follow will address each stated issue above and introduce the topic as it relates to the trade deficit of the U.S. I. The Trade Deficit for the U.S. is Not a Long-Term Concern
As international trade expands, it is clear that U.S. consumption of foreign goods leads foreign producers to benefit from our consumption. Is the strength of the U.S. as a world economic power at risk as a result of carrying a significant international trade deficit? The principles of free trade and consumption versus protectionist policies and national savings are examined to explain what the future holds for the U.S. as a result of its trade policies. Argument in Support:
First of all, a basic concept of free market capitalism is the Theory of Comparative Advantage. One case study from
As international trade expands, it is clear that U.S. consumption of foreign goods leads foreign producers to benefit from our consumption. Is the strength of the U.S. as a world economic power at risk as a result of carrying a significant international trade deficit? The principles of free trade and consumption versus protectionist policies and national savings are examined to explain what the future holds for the U.S. as a result of its trade policies. Argument in Support:
First of all, a basic concept of free market capitalism is the Theory of Comparative Advantage. One case study from