Market Correction

3 January 2005

Editor, The Wall Street Journal
200 Liberty Street
New York, NY 10281

To the Editor:

Thanks for publishing Arthur Laffer’s clear explanation of the trade deficit (“Destination U.S.A.,” Jan. 3rd).

Each semester I ask my students how they would react if a savvy investor offered to invest in their future – say, to lend them money for college or to buy equity shares in a business they started. “Would you complain or rejoice?” I inquire.

“Rejoice!” they exclaim immediately, no doubt envisaging such a happy development.

“Rightly!” I assure them. “So let’s hear from you no nonsensical worries about the trade deficit. The world has problems enough that warrant our concern without our mistaking good fortune for ill.”

Sincerely,
Donald J. Boudreaux
Department of Economics
George Mason University