> spend eventually comes back to you. Some actually say that a 100%
> trade deficit with every other country would be the best possible
> scenario. This would be like buying goods and services from another
> country, and they never purchased any of your goods and services,
> ever. You get all of the goods and services that you need, without
> having to give your own goods and services in return, all you have
> given the other countries are little scraps of paper with pictures of
> dead presidents on them, which are really cheap to produce. If that
> country never buys any of your goods and services, you never have to
> send anything of material value outside your border. You've got the
> benefit of the other country's goods and services, and you get to keep
> all of your own too!
>
One problem with this kind of scenario is that those pieces of paper
with pictures of dead presidents become worth increasingly less
against, say pieces of paper with pictures of a queen, and in the end
lead to high rates of inflation and raises the price of these goods
that we are importing.
It's a bit more complicated that it was in the days of the gold
standard, but the principle remains the same, print more money and it
becomes worth less.
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