Budget Deficit worse, Trade Deficit worse, but Economy strong?

According to this article in the Washington Post, the trade deficit continues to expand. The Bush Administration sees it as meaning that U.S. consumers can continue to afford to buy imports. Of course the fact that China has pegged the Yuan to the Dollar, explicitly to keep its products cheap in the American market, means that what this really means is that consumers here can’t afford to buy anything else.

Jeff Danziger’s editorial cartoon sums it up neatly.

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