There isn't a single reply yet that coherently addresses Stiglitz's argument. It's all just contrarian noise. Especially intriguing is George's statement that China is just looking after it's own interests. I guess Trump isn't? And "Make America first" is not a tribal call to close ranks?



Let America begin saving more and spending less and we will see the deficit problem disappear overnight and America run a surplus on trade. But so long as America keeps consuming goods and services that they aren't producing, the difference will have to be made up by their neighbours. Balance of trade is an accounting IDENTITY and it can't be changed by clever arguments. Imports have to be earned with exports or else put on a bill and added to the debt (check the US Capital Account of the BoP!). And what a lot of people seem to miss is that we do not borrow their MONEY. Their money is just a vehicle, a unit of account It cannot be used to buy anything in America. What we do borrow is their goods and services. To be repaid in the same manner, sometime in the future. And it won't be easy to go from full tilt borrowing to repaying.



Problem is, it is awfully expensive to ring the world with military bases, prosecute wars, foment or suppress insurrections (depending on their flavour) and forego billions in tax cuts and loopholes for the wealthy individuals and corporations without tightening the proverbial belt - always politically unpopular. And if the belt isn't tightened then there will be more borrowing. And this President seems keen on loosening rather than tightening the belt.



A wise man would bet on persistent trade deficits at least during this Presidency. But, perhaps, that is not the problem. Mr. Stiglitz has offered an opinion on what the real problem today is (and what isn't). You may disagree with him, but if you do, please explain why your opinion should be preferable to his. Don't just rant.