The United States' Trade Deficit

Paper Summary:

This paper discusses the trade deficit problem that the United States is currently facing. The author analyzes the possible reasons for this trade imbalance and discusses the issues and problems this will cause.

Outline:
Abstract
Foreign Investments
The U.S. Dollar
Gravity of the Trade Deficit
References

From the Paper:

"The constantly increasing US trade deficit is a highly severe problem for the wellbeing of the American economy. Its gravity is given by numerous effects and implications. For instance, as mentioned before, it can generate the devaluation of the national currency. Then, investors will no longer be interested in possessing the dollars, nor in investing in the country. To once again capture their interest, the state officials will have to implement numerous benefits and monetary regulations which encourage foreign investments, such as increasing the interest rates. This increase of the interest rates means that financing opportunities from banking and other financial institutions will be more difficult to get, and more expensive. Therefore, the companies will have to attract foreign capital. But this will also affect the population as it will limit their possibility of financing their projects. All this could lead to economic recession in the United States."

Sample of Sources Used:

• American Economic Alert, 2008, Trade Ticker - The Up-to-the-Second Counter for the U.S. Trade Deficit, http://www.americaneconomicalert.org/ticker_home.asp, last accessed on February 8, 2008
• Bater, J., June 13, 2005, Trade Deficit Widens as Prices Rise for Oil and Other Imports, The Wall Street Journal
• Central Intelligence Agency, 2008, The World Factbook - United States, https://www.cia.gov/library/publications/the-world-factbook/geos/us.html, last accessed on February 8, 2008
• Griswold, D.T., 1998, The Causes and Consequences of the U.S. Trade Deficit, The Cato Institute, http://www.cato.org/testimony/ct-dg061198.html last accessed on February 8, 2008
• Shostak, F., February 2, 2006, Does the Widening US Trade Deficit Pose a Threat to the Economy?, Ludwig von Mises Institute, http://www.mises.org/story/2029 last accessed on February 8, 2008

More papers on The United States' Trade Deficit:

• Essay # 29519 : "The United States Trade Deficit"
• Book Review # 124178 : "The United States of Europe"
• Research Paper # 59809 : "Living and Working with NAFTA in the United States"

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