Here's my question to you: Have Americans been made worse off because of the $70,000 current account trade deficit? I'd answer no. Of course, Congress could do something to reduce the trade deficit. They could impose tariffs and quotas to restrict the number of Lexus cars being exported to the U.S. or the White House could, as was done during the Reagan administration, intimidate Japan into "voluntary export restraints." Again, would Americans be better off? By the way, there are other ways for capital inflows, or investment in the U.S., to occur. With the dollars foreigners earn selling us goods, they purchase U.S. stocks, bonds and real estate. As a people, we should be proud to be a nation in which millions of people around the world want to buy into.
What about the argument that American producers are undercut by cheap goods imported from low-wage countries like China? Whose fault is this? The answer is easy. If American consumers refused to buy goods produced in China, there would be no Chinese-made goods on store shelves. American consumers who prefer lower prices to higher prices are the true enemy of American companies and their unions whining about "free but fair trade." They should show up in front of Walmart and other sellers of foreign products and denounce American consumers who buy foreign-made products. That would be honest. The "free trade but fair trade" lobby finds it more effective to pursue their agenda by stealth -- namely intimidate and bribe congressmen into enacting tariffs and quotas.