Question

How does the US economy manage with a large trade deficit?

Answer 1

Through debt, they still havent paid theirs but feel magnaimous enough to clear of the debt owed to them by other countries.. . The coutries to which the US owes are scared of rupturing what is the largest market thay have and putting a whole lot of their workers out of jobs and then there are a lot of associated industries.. . It is all a big pile of cards waiting to be blown away

Answer 2

Long term, it won't.. . Bush is gutting social security, medicare, etc. to pay for his little war and the budget has STILL never looked worse. Some day, they (China etc.) will come to collect.

Answer 3

Are we talking goods, or deficit? If you mean 600billion deficit, then remember that this includes investments the US is making in other countries, as well as the costs of military actions abroad. This is all included in the balance of payments.. . Profits from investments abroad, in the long run, will help lower the deficit. Most countries in the world (and their currencies) depend on a stable US dollar, it is this interdependency that will help the US in case there is ever a problem with the economy in the near future (highly unlikely).