Trade Deficits

Don Boudreaux has been beating the trade deficit drum since he started his blog. I think this is the best he's done yet:

It’s as if Congress is saying to foreigners: “We don’t want to borrow all this money. But because the American people buy so many goods and services from you, and because you are willing to lend us lots of the dollars that you earn from these sales, we here in Washington have no choice but to run large deficits and borrow from you much of the money necessary to finance these deficits. Damn you! Damn you! – for we all know that this much borrowing is irresponsible and bad for the long-run health of the American economy. And yet you continue – you continue! Damn you a thousand times! – you continue to lend us, the government, money whenever we ask for it.

“This will not do! No sir! We’ll show you! We will force our own people, American consumers, to pay prices for your goods and services that are much higher than those that you ask them to pay. This is our way of teaching you foreigners a lesson – which is, don’t offer attractive deals to American consumers, because if you do, then you’ll earn dollars, and if you earn dollars, you’re too likely to lend those dollars to us – the political class – who simply cannot resist borrowing those dollars from you and spending them on utterly wasteful programs that harm the economy. How dare you!!”

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