It is difficult to determine any benefits of trade deficits especially when millions lose their jobs and businesses due to the process. Some economists tell us the trade deficit numbers are just accounting statistics, but these are globalist free traders who think when all the values balance, everything works out for the better. However, if it takes a century of suffering for millions of people, something is radically wrong from the beginning. The basic formula is based on a rationale on dividing investments from productions and moving production anywhere in the world for the sake of cheaper labor costs and more profits for investments. The increase in profits supposedly are supposed to balance out the lost in the value of workers and labor. However, with more than a billion people in the world who are willing to work for practically nothing to survive, it becomes a never ending race to the bottom. With free trade economics depending on consumption economics, it needs a sufficient number of consumers with sufficient amounts of money to support the whole process.
The U.S. Federal Government sponsored the moving of factories outside of the U.S. starting in 1956. It was supposed to be a temporary program to test the waters where Mexico could create more jobs and a better economy while the American consumers could enjoy cheaper products. The problem with this , it knocked out decent paying jobs and profitable businesses in America. This resulted in millions of Americans losing their jobs and businesses with the value of workers and labor being degraded and deflated in America. It created a new working poor class in the U.S. with many needing government assistance to survive. There are even many who have jobs but are homeless not having enough money to afford the cost of shelter. Today there are 92 million jobless in America. About 50 percent of all workers living in economic limbo or a silent depression. The trade deficit is a take away value and it never will be able to have the value of workers and labor in parity with investments and purchasing power. The working poor in the more prosperous countries will grow in numbers and the impoverished workers in other countries will not even be able to afford the things they make let alone have anything left over to buy the things the more prosperous nation has left to sell.
There is another problem. free trade is not fair trade. Governments act as brokers and dealers in a global economic arena. To get an extra edge on one another, governments manipulate money values and subsidize their own industries to gain an upper hand. It is like companies in much of our history who are willing to sell at costs or under costs to control a market and then raise prices to make a profit. So the ones with the most money knock out those with less. There are also others who run their businesses strictly for the sake of stock values. Others laundered money including drug money. There are no umpires or referees controlling things from getting out of hand.
It comes down to this. There are about five to seven added values from the raw product stage to the retail or end user stage. All the money spent at the retail level or end user level quickly fans out to where the products are made for grown. This means that in America, the money quickly fans out to a far away place somewhere else in the world and does not stay in place to recycle the U.S. economy. This is why the U.S. now has a 19 trillion dollar debt. Only value added economies , as local as possible works. The money stays in place to recycle that particular region. It adds to the value of workers and labor and does not subtract from it.
Note the following:
Why Karl Marx Advocated Free Trade (Capitalism)
Peter Myers, Canberra, http://mailstar.net/classwar.html
Karl Marx advocated Free Trade, i.e. Capitalism, because (a) whereas Protection builds up the nation-state, Free Trade breaks it down, as a prelude to the creation of a world-state by the Capitalists (b) Free Trade breaks down traditional culture, as a prelude to the creation of a world culture (c) Free Trade exacerbates class warfare, and through this the Capitalists will lose control of the world-state - they will be defeated by the impoverished classes, with the help of their backers in the higher classes. And this is what is happening in our times.
During a stimulus debate when Pres. George W. Bush was president, a congressman asked former Federal Reserve Chairman Ben Bernanke what was the best way to stimulate the economy. He said that the best way to stimulate the economy was to buy "domestically produced goods." This is the simple answer to the question about the trade deficit being able to evolve into anything good. The trade deficit and the lost of value of workers and labor represents trillions of dollars in value lost forever.
In 2008, President Obama had to bail out the whole process by borrowing trillions of dollars from the futures. However, he only bailed out big money interests, investments and financial communities, banks and the " too big to fail" corporations. He ignored the suffering of millions who lost their jobs and businesses due to free trade economics and if effect, free trade economics and in a domino fashion, the stock market and 401k saving plans are a ponsi scheme which can burst at any time.