THE TRADE DEFICIT….Long term budget deficits are a bad thing, but when you get right down to it they aren’t really that bad. This is true of lots of other economic trends as well: sure, they’re bad, but they aren’t catastrophic and in any case are eminently solvable with a bit of political willpower. (In short supply these days, I admit.)
In fact, a while back I mentioned in an email to Megan McArdle that there were only two economic trends that really worried me: growing income inequality and the skyrocketing the trade deficit. I’ve written a bunch about income inequality recently, and a few days ago Billmon tackled the problem of the trade deficit (which, by the way, is referred to by all cool people as the “current account deficit”). If you want to learn more about it, go read his post.