Trade Deficit Truths

I have commented many times in the past about the trade deficit. Unlike many others, the trade deficit doesn't worry me. The last time the US ran a trade surplus, the economy was in recession. The evidence is overwhelming that free trade benefits those countries that practice it regardless of whether their trade partners are as open. Look at these charts showing imports and exports:

It seems to me that the exports are a reflection of the strength of our trading partners economies and the imports are a reflection of the strength of our economy. This article from Dan Griswold (Cato Institute) confirms that the popular view of the trade deficit is exactly wrong:

As the comparison shows, there is no evidence that an expanding current account deficit is associated with slower economic growth. In fact, data show the opposite correlation:
In those years since 1980 in which the current account deficit actually shrank as a share of GDP, real GDP growth averaged 1.9 percent.
In those years in which the deficit grew modestly, between 0.0 and 0.5 percent, GDP growth averaged 3.0 percent.
And in those years in which the current account deficit expanded by more than 0.5 percent of GDP, real GDP growth grew by an average of 4.1 percent.

Beware of politicians spouting economic drivel. Protectionism is the single greatest threat to our prosperity. Hopefully someone will inform Congress about the facts before they do something really stupid.