[DannyTN]

Balance of payments is an accounting construct, similar to a balance sheet. It does have to balance. But a balance sheet can balance despite you being insolvent. Your debt can far exceed your assets and the difference will appear as negative equity. That a balance sheet balances, does not mean everything is okay.

Similarly balance of payments in international goods will always balance, because every transaction has two sides. But it doesn’t mean everything is good or healthy with the economy. We have a large trade good deficit. Balance of payments is balanced only because we sell a lot of government debt, corporate debt and ownership of our industries to China every year.

[Toddsterpatriot]

But a balance sheet can balance despite you being insolvent.

We're insolvent?

Similarly balance of payments in international goods will always balance, because every transaction has two sides.

Excellent! Now you see why the trade deficit is such a silly number to whine about.

But it doesn’t mean everything is good or healthy with the economy.

Well, Obama is President and government grows ever larger, so that is a problem.

Balance of payments is balanced only because we sell a lot of government debt, corporate debt and ownership of our industries to China every year.

Well, if Americans saved a lot more and the government spent a lot less, that wouldn't be an issue.

Giving the government more money, thru higher tariffs, isn't going to reduce government spending, is it?

[expat_panama]

...doesn’t mean everything is good or healthy with the economy. We have a large trade good deficit...

So the question is whether the trade deficit comes with a bad economy or comes with a good economy--

--and what we know for sure is that a growing trade deficit is followed by more people getting work, and that when the trade shrinks people become unemployed.  We can all have opinions on why it happens but it's not healthy to pretend that things are other than the way they are.

...payments is balanced only because we sell a lot of government debt, corporate debt and ownership of our industries...

Actually no.

This idea of a trade deficit making America poor again conflicts with reality.  If it were true then America's total private net worth would have shrunk when the TD was bigger and grew when the TD fell.  It didn't, in fact the opposite is what happened. 

The fact is that the so-called 'trade-deficit' is the "accounting construct".  If I hire Chinese musicians to write songs that I copyright in my name, and then I pay them with the rights to my new book, it's a trade deficit.   The next year I can cause a trade surplus if a Chinese book company hires me to write and I use my paycheck to buy the rights to songs written my my musician friends.

Both years it's the same work and same products and only the names of the products change; but one year's a deficit and the next is a surplus.