Interview Of The Year: Jeffrey Sachs Vs Donald Trump | Fiery Conversation That’s Gripping America

I if you take your credit card and you go shopping and you run up a large credit card debt you're running a trade deficit with all those shops . Now, it would be pretty strange if you then blamed all the shop owners for having sold you all those things . You're ripping me off. You're ripping me off. You're ripping me off . I'm running a trade deficit . That is the level of understanding of the president of the United States . The trade deficit does not represent at all trade policies . It represents spending relative to production or earnings . [snorts] We call that an identity. I teach it in the second day of my course in international monetary economics . Trump never made it to the second day . So, he says you're running a trade deficit . Look, they're all cheating me . But all that's happening is the United States is outspending its national income . And you can look at the national income chart . You can add up consumption and investment and government spending and you could subtract off gross national product and lo and behold , what will that equal ? Not approximately, exactly . That will equal the current account deficit , which is the comprehensive measure of how much you spend on goods and services versus how much you sell in goods and services . So, the United States runs a current account deficit because it spends more than it produces . Why does it do that?