[dennisw]

Part of the reason that the European economy has been able to keep abreast with the US’ is our trade deficit, which has sent the dollar downward. I guess that’s good for Boeing, but not a fabulous trend, frankly.

What amazed me here (read the entire Washington Post article) is Europe doesn't run a trade deficit. I was so shocked I had to verify and it is true LINK

So very roughly the EU has same size economy and same population as the United States but we run an 850 billion dollar trade deficit (2006) and EU is in trade balance. No wonder the € is rising and the $ is sinking.

[DoughtyOne]

At one point about six years ago, I read an article that mentioned that the United States was the only nation running trade deficits with China. What a hoot. If it was such a great idea, you’d think at least one other nation would have been running them.

It was also rather stranget to see the United States warn off European nations from running large trade numbers with China a few years back. Hell, we sell our soul to China, but don’t suggest anyone else do it. Why the hell not?

[DoughtyOne]

I agree with your comments BTW. I think you’re right on target there.

[SergeiRachmaninov]

So very roughly the EU has same size economy and same population as the United States but we run an 850 billion dollar trade deficit (2006) and EU is in trade balance. No wonder the € is rising and the $ is sinking.

I heard on the BBC just an hour or so ago (yea, yea, I know that a chorus here will ridicule the messenger and discredit the message) that Germany recently displaced the U.S. as the world's largest exporter. None of this makes me want to embrace Eurosocialism, though.

There is a sad take-home message in all of this: The U.S. no longer stands astride the world like an economic collossus (if you will forgive a flamboyant cliché). No amount of flag waving indignation can change this reality.

[marktwain]

“So very roughly the EU has same size economy and same population as the United States but we run an 850 billion dollar trade deficit (2006) and EU is in trade balance. No wonder the € is rising and the $ is sinking.”

Why do you think trade deficits are “bad”? In our history, we have had the most economic growth when we had trade deficits. The definition of a trade deficit is so artifical that it means little in the big picture, although it does seem to have a rough correlation to economic growth.

If the dollar becomes cheap compared to the euro, it only means that we buy less from europe and they buy more from us. That serves to lessen the trade deficit.

As you think trade deficits are bad things, why would you think that would be a bad thing?