America’s trade deficit represents capital flowing into the U.S. True, some of this inflow finances Uncle Sam’s Eliot-Spitzer-party-like spending. But that spending is caused by reckless politicians, not consumers. Nearly all the rest of the trade deficit represents positive investments in America - investments that not only signal continued investor confidence in the U.S. economy but, more importantly, investments that finance R&D, product development, worker training, new firms, factory modernization, and other activities that promote economic growth.
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