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Trade balance and Fiscal Policy

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LandJ posted on Fri, Apr 12 2013 5:18 PM

Mercantilists and Protectionists claim that surplus in trade balance is the ultimate goal. Is that true? To justify this, they offer as an example Germany. But if this is true, then all the subsidies to local businesses, infant industries and high tariffs seem  to be necessary. 

a. Do Libertarians believe that a trade deficit is not the problem? If so, can you explain it please?

b. Why fiscal deficit is the problem?

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LandJ:
Mercantilists and Protectionists claim that surplus in trade balance is the ultimate goal. Is that true?

Is it true that that's what they claim?  Yes.

Is it true that that is a truly rational and desirable aim if your goal is peace and prosperity?  No.

 

a. Do Libertarians believe that a trade deficit is not the problem? If so, can you explain it please?

I'm sure there are some Libertarians that do believe that.  But (a) I see a difference between Libertarians and libertarians, (b) I don't necessarily see this as a philosophical issue, so I'm not sure that being a libertarian is relevant.

 

b. Why fiscal deficit is the problem?

See Trade & deficit

from The Ultimate Beginner meta-thread

 

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