Where the capital goes is distinct from the fact that it's coming in the first place. No one is choosing to misallocate capital, which then drives foreign inve

Where the capital goes is distinct from the fact that it's coming in the first place. No one is choosing to misallocate capital, which then drives foreign investment. The dynamic that makes more sense to me is: foreign entities want to invest in the US, they deploy capital here, and that creates liquidity (lower interest rates, etc) while also increasing the debt load. How that capital gets allocated is a function of domestic dynamics (political, economic, etc) -- but the fact that there is capital to allocate is, as I note, exogenous.