Is trade deficit a concern?

A question from Yahoo! Answers:

With the current situation with the u.s. deficit should we be concern? do you agree/ disagree with FREE TRADE

i was reading up about china and canada and i just need someone else’s opinion about FREE TRADE and the condition that our deficit is in.

Trade deficit is a statistical illusion. If you consider the flow of capital in addition to the flow of goods, you will see that there is no deficit. Americans are simply paying for goods and services with stocks, bonds, land, and real estate…

The deficit you do need to worry about is not the trade deficit, it’s the budget deficit… Trade deficit has a way of taking care of itself through currency adjustment. Budget deficit doesn’t.

As to agreeing or disagreeing with free trade, it’s somewhat akin to agreeing or disdagreeing with gravity. Regardless of whether you agree or disagree, gravity will exist and free trade (when it is allowed) will produce gains to the world as a whole, which, needless to say, will benefit some people more than others…

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