A Stronger Dollar Means a Larger Trade Deficit and More "Secular Stagnation"

The Washington Post had a major business section piece on the "winners and losers of a stronger dollar" which never explicitly discussed its impact on the trade deficit. This is truly remarkable since the $500 billion plus annual trade deficit (@3 percent of GDP) is the main cause of the economy's weakness and continued high unemployment.

The logic of this is straightforward. The deficit is money that is income that is generated in the United States but is creating demand overseas. It has the...