@astonc My view is that meaningful causality is much more from trade deficit to fiscal deficit than the other way around. Trade deficit is a demand drain. The easiest way to counter that and sustain full employment is with a trade deficit. (The article is a mixed bag to me, I don’t buy his trade-balance-is-futile-while-big-fiscal-deficit view, though agree tariffs are a dumb approach. I share his view we should have terms out US debt when rates were low, said so at the time.)

@astonc In general, budget balance requires (1) a diminishment of demand for USD securities, otherwise you get dangerous private-sector “AAA” substitutes and financial fragility; and (2) alternative means than deficit spending of sustaining demand (like taxing the rich to “fund” benefits to the nonrich, who spend rather than bank their marginal dollar).