US trade defecits are still the worst in living memory

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Here's the chart:

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This is akin to what happened to Spain in the 16th and 17th centuries, when all the gold and silver discovered in the new world was spent on Dutch imports. Which made the Dutch Republic very rich, eventually making them the dominant superpower, displacing the Spanish...

What can the US government do?

The oddly titled "Inflation Reduction Act" has tried to give incentives to domestic manufacturing. But ultimately things won't change till US consumers buy American.

Tariffs on foreign products won't work, Trump tried it and anti-Trump forces gleefully bought foreign goods to spite him. If Biden did the same (and he's not repealed the Trump tariffs), anti-Biden forces would gleefully buy foreign goods to spite him too.

Ultimately maybe only the Federal Reserve Bank can resolve this; raise interest rates to the point where it's too expensive to buy foreign stuff



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