Selling treasury bonds doesn't mean the government is 'borrowing' anything; they're a hand-out to savers. It's the difference between interest bearing and non-

Selling treasury bonds doesn't mean the government is 'borrowing' anything; they're a hand-out to savers. It's the difference between interest bearing and non-interest bearing U.S. liabilities (checking vs savings account). The real 'problem' if anything is that trade deficits mean that net government spending has to fill the void in domestic demand lost through the foreign surplus (else the domestic private sector must necessarily go into deficit).