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I feel like you have internalized somehow a confusion between the concept of balance of payments and government spending policy - the two are slightly related,

I feel like you have internalized somehow a confusion between the concept of balance of payments and government spending policy - the two are slightly related, but not like this. If China sells more stuff to the US than the US buys from China, then China ends up being a net holder of US dollars, which end up in some US denominated investment asset. This is the balance of payments. Since China is a net exporter to the US, it is also therefore a net investor in the US. The question of what the investment ends up being in is affected to some extent by the availability of US debt, but it could equally well end up being in equity or real-estate or whatever.

bioemerl 4y ago
Debt that cannot be paid well is a problem no matter where it is. The US government is the best place for US debt - they are most equipped to pay it. I'm actually all for how it's being handled here. The debt is a problem in general, no matter the form it takes. The fact the balance is forced to be off as a result of Chinese policy and our failure to counter it in the name of free trade is the problem. It forces the US national debt up because if it wasn't the national debt it would be in far more harmful places, so our politicians have no choice. Increase debt or lose your job next election.