[HiTech RedNeck]

If the US runs a trade deficit of $1 jillion this year that means it has net doled out $1 jillion of cash (or IOUs) to the rest of the world. What happens if the US keeps that up every year? It has to print out $1 jillion (in IOUs if you must) for each such year to make up for it, doesn’t it?

[1rudeboy]

I am not spending the U.S. Treasury's money, nor am I issuing IOU's. I am spending my money that I have earned on the products that I wish to buy.

I'm not spending your money, either.

[Toddsterpatriot]

What happens if the US keeps that up every year? It has to print out $1 jillion (in IOUs if you must) for each such year to make up for it, doesn’t it?

Yes, if the US government buys more than they take in, they must issue bonds. That still has nothing to do with my purchase of foreign beer.

[Black_Shark]

It all depends on whether the deficit has been invested or has been used for current consumption. If invested, the proceeds from the investment will allow us to pay back the deficit amount AND our country will be better off. If used for current consumption, we spent the money, have nothing to show for it and still owe a big darn bill. Therefore, we must issue more debt in order to raise the funds to pay the current bills. Unsustainable.