October 17, 2012
A Washington Post fact check on the debate commented on a debate question on outsourcing:
“But economists are unanimous that trade, including outsourcing, is hugely beneficial to economic growth at home and abroad.”
This is highly misleading for two reasons. First, economists are unanimous in agreeing that trade could have major distributional consequences. And some prominent economists, such as Paul Krugman, have argued that the recent pattern of trade for the United States has had negative distributional consequences for large segment of the U.S. workforce.
The second reason that it is misleading is that economists are unanimous in believing that in the context of below full employment economy, like the one we have seen the last five years, a larger trade deficit implies lower growth and fewer jobs. In this context outsourcing hurts the economy.
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