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Old 02-10-2006, 02:22 PM  
Libertine
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Join Date: May 2002
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It's important to note the causes of the current trade deficit to understand why it is problematic. A trade deficit isn't a problem if it is caused by excess wealth being invested abroad in structurally valuable assets.

However, the current trade deficit is largely caused by huge spendings in oil and Americans rapidly spending their savings and, worse, creating debts. Since this spending is just spending, not investing, it does not offer any long term benefits.

Now, as for the role the Bush administration has played in this, that should be quite clear. It has encouraged and participated in wasteful spending through its tax policy and fiscal policies and it has done very little to slow down oil usage.
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