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knb comments on Non-standard politics - Less Wrong Discussion

3 Post author: NancyLebovitz 24 October 2014 03:27PM

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Comment author: knb 26 October 2014 04:39:53AM 1 point [-]

The US trade deficit is not "tribute," the idea is absurd. The trade deficit is not "you give us goods, we give you nothing," it is financed by a combination of sales of US based capital to foreigners (American real estate is especially popular) and Americans going into debt with foreigners. (As Edward Conard pointed out, the two amount to the same thing.) Since these debts are paid back, with interest there is no way it could be interpreted as tribute.

Comment author: CellBioGuy 30 October 2014 02:10:36PM *  -1 points [-]

Since these debts are paid back, with interest there is no way it could be interpreted as tribute.

Not true for treasury bonds, they roll them over rather than paying them down. The (likely temporary) special status of the dollar in international trade imposed after WWII also means that it is in high demand outside the US, giving us a special place as the source of dollars which can get extra stuff for them.

Regardless, end result is still more stuff for Americans.