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"How about the trade arrangement we had before NAFTA? If we had done nothing, we would have lowered our trade deficit with Mexico and Canada by 87 billion." - Nachum

That's marginally possible (though keep in mind that we import quite a bit of oil from Mexico), but is it desirable?

Are trade deficits always a problem? Are trade deficits always the *biggest* economic problem?

Or do trade deficits merely make good boogeymen...easy to demagogue?

Or do trade deficits merely make good boogeymen...easy to demagogue?

I was merely responding to the poster's comment about how much better we were doing. While it is not the figure that America's economy is based on, it certainly is important and should not be ignored. No, I do not think it is only a boogeyman.

I always find the chicken littles squawking on trade deficits quite amusing. As of now, it is good for the US to have a trade deficit with these 2-3rd world countries trying to part of the global economic club.

First of all, it means that they are now making money instead of the US throwing "aid money" propping up failed regimes or policies. In order for them to grow they need to produce goods and services that make money -- which naturally means a trade surplus for them and a deficit for the US.

With they extra money they make and the growth they'll experience, eventually they are going to need infrastructure goods and services that we are the best at. Thus, the amount they buy from us will increase over time -- not a bad thing! The growth of buying from us can and will happen as we are in a trade deficit(s) with them. To that I say what is the big f'n deal?

Sure, some industries will suffer, but that is just the nature of life. Should have we forgone the automotive industry in order to protect buggy whip manufactures? Of course not. As with any bold change, one usually has to get rid of some of the old way in order to make room for the new way.

In this case, the new way is to provide a platform of economic democratization in our own vitally strategic back yard -- Central America. This is the larger picture big deal that trumps the chicken littles squawking about trade deficits 100s of times over! The truth is these chicken littles have a very short sighted and perhaps selfish view of history.

Anybody who has looked at the history of the '80 with an objective eye knows just how important the Central American region is to our security. If one is too lazy to look at history, well then have them play 4-5 games of Risk and they'll know how important that area is.

CAFTA is a historic achievement, paid for by plenty of sweat and blood over several decades. It may not be perfect, but as an American free trader I am damn proud we did the right thing tonight.