Dennis Sevakis' article today on the supposedly dire consequences of the nation's "trade deficit," while obviously well-intentioned, misses the mark in several respects.First, the article is based on the common misconception that a "trade deficit" represents a "transfer of wealth to persons and sovereign entities outside the United States."  This is not correct.  Consider the balance of trade on goods, which represents the vast majority of the U.S. trade deficit.  The data provided by Mr. Sevakis show that in 2006, this figure was negative $838 billion.  This means that in 2006, Americans purchased $838 billion more in goods from foreigners than foreigners purchased in goods from Americans.  It cannot be said, however, that these purchases resulted in a "transfer of wealth" to foreigners.For example, if an American consumer buys wine from an Italian vineyard, there is an exchange of wealth, not a transfer of wealth -...(Read Full Post)