William Greider\'s Truth Deficit

This was a letter to the editor of the New York Times.

To the Editor:

William Greider is terribly worried about the U.S. trade deficit - so worried, in fact, that he believes criticism of this trade deficit will be met with Soviet-style censorship ("America's Truth Deficit," July 18). Instead of censorship, Greider's outdated mercantilist complaints should be met with ridicule. Economists have long recognized that the U.S. trade deficit is a good thing: foreign banks and investors prefer to hold U.S. dollars because they have confidence in our healthy economy, strong currency, and stable political situation. The rest of the world is essentially giving us a free loan in the form of imported goods – goods we don't need to pay for as long as foreign holders of U.S. assets put their trust in our system. And if they ever do decide to use their dollars to purchase U.S. goods, the trade deficit will disappear.

Micha Ghertner

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