Sorry, I don't follow you. Chronic, continual, large trade deficits must be paid for in some way. Unless you can truly enslave another country, you must pay for your imports from that country. Payment must be in terms of goods or services or, if you happen to possess the world's reserve currency, bits of paper or even bits of electrons on a digital account will suffice.
Sorry, I don't follow you. Chronic, continual, large trade deficits must be paid for in some way.
When I buy stuff, I pay cash. So why does my purchase of Japanese electronics or Swiss chocolate, both of which increase our trade deficits, have to be financed again?
Imports certainly must be paid for; I was objecting to those who claim that the United States is borrowing money [financing] to do so. It isn't.
The government doesn't import goods, citizens do. And they either pay cash or borrow the money from the local bank and pay it back out of their earnings. The money China lends the U.S. government does not pay the bills for our imports from China. It funds the operation of the government.
They are two separate issues.
I live near the Canadian border. Now, I can buy my groceries in Buffalo, for example, and though I have a personal trade deficit with the supermarket, there is no addition to the national trade deficit. If I decide to cross over to Fort Erie, Ontario and buy my groceries there, I still have a personal trade deficit with the Canadian grocer, but now, interestingly enough, I've added to the national trade deficit.
Canada has financed nothing. I paid for it all.
If the government is truly worried about the trade deficit [it isn't,] it would set about to lower the costs of doing business in the U.S. so as to lower domestic prices. All trade takes place because of prices.