Trade Deficits: a fancy name for foreigners investing a lot in our country

Don Boudreaux on Trade Deficits

He says that trade deficits are good for the country experiencing the deficits. If the United States has a trade deficit with Argentina, it means that more Argentinians are investing here in the United States, buying our products, which effectively creates jobs and markets for us here. But it’s not like Argentina is poorer as a result of trade deficits, for they are buying and perhaps reselling items purchased in the U.S. It’s a crazy topic only because governments like to invent policy measures around a meaningless statistic like trade deficits.

Do we need to do anything about the trade deficit?

No.

UPDATE, 5/30/2017

Wenzel catches Donald Trump’s stupidity on trade deficits:

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