Thursday, October 11, 2007

The upside of a falling dollar

And still people don't think it's a good economy.
WASHINGTON - The falling dollar led more foreigners to buy American in August, helping to push the trade deficit down to the lowest point in seven months. That was welcome news for the Bush administration as it tries to deal with a Congress unhappy over huge trade imbalances and 3 million lost manufacturing jobs.

President Bush also got good news Thursday on his other deficit headache. The budget deficit declined in 2007 to the lowest level in five years, dropping to $162.8 billion, an $85 billion improvement over 2006.

Bush said the declining budget deficit was a sign that his economic strategy of cutting taxes to grow the economy was working. But Democrats pointed to the soaring national debt under Bush as evidence of his fiscal irresponsibility.

The Commerce Department reported that the trade deficit declined to $57.6 billion in August, down 2.4 percent from the July imbalance. It was the lowest gap between exports and imports since January and a much better showing than had been expected.

The improvement reflected a 0.4 percent rise in exports, which climbed to a record $138.3 billion, as the decline in the value of the dollar against many other foreign currencies boosted sales of American farm products, industrial supplies and consumer goods to all-time highs.

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