Fed. Chairman Alan Greenspan said today that American deficits haven’t hurt the U.S. economy for one main reason: free trade. He warned that protectionism makes the world economy not as flexible to soak up American deficits, and has the possibility of hurting America down the line.
“The costs of any new such protectionist initiatives, in the context of wide current account imbalances, could significantly erode the flexibility of the global economy,’ Greenspan said.
“Consequently, it is imperative that creeping protectionism be thwarted and reversed,’ he said.
It’s just one more reason to support free trade.