Subscribe to Entrepreneur for $5

Crying Wolf

Fear of the trade deficit is common--but is it warranted?

This story appears in the December 1998 issue of Entrepreneur. Subscribe »

Don't let 'em scare you. "America's trade deficit is a sign of strength, not weakness," argues Daniel T. Griswold, associate director of the Center for Trade Policy Studies at the Cato Institute, a libertarian think tank in Washington, DC.

Griswold is the author of a recent study that dispels a number of economic myths. "The trade deficit isn't a result of unfair trade barriers," he contends. "What controls the deficit is investment flows. The money flowing out of the United States to buy imports flows back in net investment."

Continue Reading This Article—And Everything on Entrepreneur!

Become a member to get unlimited access to for less than $1 per week* and support the voices you want to hear more from.*Billed annually at $49/year. Cancel anytime.