Morici: Trade Deficit a “Fundamental Structural Problem” for the Economy

The linked article reports on comments by Dr. Peter Morici, economist and business professor at the U. of Maryland, in which he discusses the possibility that we are entering a depression. 

“We’re probably in a depression now. But it’s not going to be acknowledged until years go by. Because you have to see it behind you,” said Peter Morici, a business professor at the University of Maryland.

The article then goes on to list those factors that economists have traditionally used to define a depression.  But it’s this comment by Morici that really caught my eye:

Morici said a depression is a recession that “does not self-correct” because of fundamental structural problems in the economy, such as broken banks or a huge trade deficit.

This may be the boldest criticism of our trade deficit that I’ve seen yet from Dr. Morici , someone who’s gotten a lot of “face time” in the media since the start of this crisis and whose credibility seems to be on the rise.  By identifying the trade deficit as a fundamental problem making this recession/depression unable to self-correct, he’s calling for government action to eliminate it.   Let’s hope the Obama administration is listening.


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