RE: IF a business continues spending more money than it makes, then it eventually goes out of business. How is it different with a nation?
Well, I have a “trade deficit” with my grocer, mechanic, barber and a whole heap of goods and service providers. I don’t consider it spending more money than I make....
“Well, I have a “trade deficit” with my grocer, mechanic, barber and a whole heap of goods and service providers. I don’t consider it spending more money than I make....”
And your employer or your customers have a “trade deficit” with you. So it’s not that trade deficits are “irrelevant” as suggested in this article, but that they have to be considered collectively. Either the US has to make up its trade deficits with trade surpluses elsewhere, or it’s got to draw value continuously out of the ground or out of thin air, and pay for the deficits that way.
I have a “trade deficit” with my grocer, mechanic, barber ...
Nope. That is a fallacy from fake New Age College Economics. You instead have a trade balance with your grocer, not a deficit.
You pay $20 for $10 hamburger meat, then you have a Grocer DEFICIT.
I pay $10 for $10 hamburger meat, then I have a Grocer BALANCE.
And I would LOVE to sell you overpaid stuff.