external surpluses and deficits reflect domestic saving and investment decisions. Economies that save more than they invest run external net surpluses (those extra goods they export over those they import pay for building up claims on capital abroad) This is the modern view of international economics: external “imbalances” are a function of macroeconomics, not of trade. Seen in a different light, net trade patterns are caused by financial flows and not the other way round. Our default judgment about how appropriate those savings and investment decisions are should, I think, be neutral or positive. Countries make different decisions (through individual market action and public policy) about whether to be net savers or net borrowers

there is a highly popular belief that China and other structural surplus economies force the US to run a structural deficit. When you pause to think about it, this is an odd view. Beijing’s policies no doubt aim to shape China’s net surplus. But why think of this as forcing Americans to do anything, rather than offering them a cheaper-than-otherwise opportunity to consume and invest more, if they want to? If Americans wanted to balance their external account, they could do so in many ways; most easily through a revenue-neutral tax reform that would provide an incentive to domestic business investment and reduce consumption. The fact that they choose not to do so suggests that they rather like the benefits that come with a structural trade deficit. And they are right, as we should be tempted to agree when we look at what those benefits are.

it allows the US to burn enormous amounts of cash to build data centres to train the large language models that have hit the world like a Sputnik flyover — without reducing consumption to fund those capital expenditures. ... by running surpluses with the US, they are building up claims on the US economy. But more importantly, they are letting American businesses take the risk on the big investments that are not, as a result, being made in surplus economies.

The point is that these — and many more investments — are things America is delighted to have. But without the external deficit, it would only be able to have them if it curtailed consumption.

Does dude have a point, or is he just straight-up off his meds?

whether the rest of the world should be happy about the US sucking in investment funding depends on their assessment of the risks — but this is no systemic critique of “imbalances”, and there is a strong case for being grateful to America.