[echotango]

A trade deficit means that, on net, your trade partners end up with your currency and no goods to buy with it. So they start buying up assets in your country. Factories, companies, land, housing, bonds, etc. so by maintaining a trade deficit for so long, we have legally sold a large fraction of the assets in our country to foreign investors. (Foreign direct investment) How do you think Trump made his billions?

Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.

Having chineese bussinessmen buy up all the valuable real estate in our biggest cities is a result of the trade deficit.

Massive underemployment (more baristas fewer mechanics) is a result of the trade deficit.

[selectodude]

A trade deficit means that, on net, you've sent a bunch of pieces of paper to a country and they have given you actual stuff in return. So then they give that money back to you by investing in your country.

>Having Saudi Oil Sheiks own all the Soccer teams in England is the result of the UK trade deficit.

More English soccer teams are owned by Americans than all the russians oligarchs and arab sheiks combined.

[king_phil]

Source?

[echotango]

>investing in your country

>foreign direct investment

>sheiks owning the sports teams and chineese businessman owning all the prime housing

We're saying the same thing

[throwawayjava]

> We're saying the same thing

That's because you still haven't answered the original question:

>>> Is a trade deficit important to not have?

E.g., consider your examples:

>sheiks owning the sports teams and chineese businessman owning all the prime housing

Given that I'm not the type of person who buys sports teams and prime housing (of the sort purchased by Chinese businessmen), why should I care about that style of FDI? I mean, I guess it must suck for the American ultra-rich that they now have to compete with the Chinese ultra-rich for access to ultra-veblen goods like owning sports teams, but... why the hell should the rest of us care which mega-rich person owns the local sports team!? What possible material impact could that ever have on us?

The only type of FDI that effects my life is FDI in productive assets, like factories, and those are strictly good for me (more and better-paying jobs).

"So we lost the Toyota factory but on the plus side the sports team isn't owned by a Sheik" seems like a really dumb trade-off. What am I missing here...?