4 ms·
The deficit is an outcome of reserve currency status. The dollars everyone is using to trade have to come from somewhere, and mathematically that means dollars
by wonnage 3y ago
The deficit is an outcome of reserve currency status. The dollars everyone is using to trade have to come from somewhere, and mathematically that means dollars leaving the US. Alternatively, the value of the dollar increases due to demand, increasing the cost of US exports while making imports cheaper, which again exacerbates a deficit.