Trade deficit be damned, full speed to free trade

You probably think we’re bad off when we import more than we export.  Of course I do, you say.  It’s better to sell more than you buy, right?  Money in the pocket and all that, including more jobs for more Americans.  You are wrong, says this guy from Cato Institute, via Carpe Diem blog, w/hat tip to Newsalert:

“The time to reform the prevailing doctrine of the trade balance is long overdue. The goal of U.S. trade policy should not be to maximize exports and minimize imports in a misbegotten quest for “balanced trade.” The goal should be to maximize the freedom of Americans to buy and sell in global markets for mutual gain, whatever the mix of goods, services, and assets we freely choose to trade.”

How so?

“What the past 30 years show is that the U.S. economy exhibits no sign of suffering during periods when the trade deficit is expanding. To the contrary, the U.S. economy grew more than three times faster during periods when the trade deficit was expanding as a share of GDP compared to those in which it was shrinking (see chart above, click to enlarge):

The chart above?  Here ’tis, below:

trade deficit good

The more the deficit, the better.  Who’d a-thunk it?