Jump to content
House Price Crash Forum
Sign in to follow this  
Realistbear

Times: U S Trade Balance And Deficit Is Improving

Recommended Posts

http://business.timesonline.co.uk/article/...2189456,00.html

The Sunday Times

May 21, 2006

US deficits are falling but there is a price to pay

IRWIN STELZER

American Account

YOU ASKED FOR IT. You’ve got it. We are at the beginning of the adjustment of the worldwide “imbalances” that have so troubled policymakers. The American budget deficit, complained the seers, is a testimonial to the profligate ways of Congress and the president, and must be eliminated now that America is on course to satisfactory growth.

Well, the deficit is coming down — and faster than even the critics anticipated. It seems that the president’s tax cuts have contributed to (not been solely the cause of) a spurt in tax receipts flowing from companies and high-income individuals into the Treasury’s coffers. Good news, you would think, until the mutterings start about the slowing effects on the economy of the tightening of fiscal policy.

The other imbalance that has so concerned policymakers is America’s trade deficit, at about 7% of GDP simply “unsustainable”. Great news — the trade deficit seems to be coming down in response to a falling dollar that has made it more expensive for Americans to buy foreign goods and services, and less expensive for foreigners to buy made-in-USA products.

Well, it’s not so great if you are a foreign company dependent on America’s vast market for a significant portion of your sales. Suddenly, EU critics of the world trade “imbalance” are complaining that the falling dollar will nip Europe’s nascent recovery — if that’s what it is — in the bud.

For firms exporting to America, the impact will depend very much on where they are located. EU-based companies should be hit hardest, as the euro rises to levels not seen for a long time.

Does not look good for EU and UK economies as exports decline and imports increase. Recession?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.