The deficit that mat­ters

The Washington Post Sunday - - SUNDAY OPINION - BY GE­ORGE P. SHULTZ AND MARTIN FELDSTEIN

If a coun­try con­sumes more than it pro­duces, it must im­port more than it ex­ports. That’s not a rip-off; that’s arith­metic. If we man­age to ne­go­ti­ate a re­duc­tion in the Chi­nese trade sur­plus with the United States, we will have an in­creased trade deficit with some other coun­try.

Fed­eral deficit spend­ing, a mas­sive and con­tin­u­ing act of dis­sav­ing, is the cul­prit. Con­trol that spend­ing and you will con­trol trade deficits.

Ge­orge P. Shultz, a for­mer U.S. sec­re­tary of la­bor, trea­sury and state, is a dis­tin­guished fel­low at the Hoover In­sti­tu­tion. Martin Feldstein is pro­fes­sor of eco­nomics at Har­vard Univer­sity and for­mer chair­man of the Coun­cil of Eco­nomic Ad­vis­ers and president of the Na­tional Bureau of Eco­nomic Re­search.

PA­TRICK T. FAL­LON/BLOOMBERG

A ship sails from the Port of Los An­ge­les in 2015.

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