Politics & Philosophy by Dr. Martin D. Hash, Esq.
Though the media tends to focus on the Trade Deficit, there are many other ways that foreign nations can receive U.S. dollars that they then send back to the U.S., which finances our National Debt, and often causes bubbles. Balance of Payments is the economic term that encompasses everything; it includes Foreign Aid America makes to other countries, that's about $40 billion a year; immigrants transferring money back to their families, that's over $120 billion a year; counterfeiting, at a measly $200 million, is too small to notice, but illegal drug sales are about $100 billion a year, and another $100 billion a year from U.S. companies investing in China.
With a Trade Deficit of $750 billion, plus all the other items, something over a $trillion needs corrected for. Foreign countries presumably do the same things back, so ideally, the deficit could be counterbalanced such that the total Balance of Payments is zero, and some figures indicate that it is. There were a couple decades, during the so-called “Washington Consensus,” when influential economists had convinced governments that the Balance of Payments did not matter, but the tide has changed; in fact, a zero balance of payments should be a nation's primary economic goal. This requires trade deals be renegotiated, unmatched investments in other countries to be discouraged, and financial transactions between countries scrutinized; all things the Trump administration is now pursuing.
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