Politics & Power Quote by Martin Feldstein

A trade deficit sounds like a bookkeeping quirk until Feldstein translates it into a power relationship: if the U.S. buys more than it sells, someone else has to front the difference, and the tab gets paid in IOUs or ownership. The line is built to puncture the soothing abstraction of “deficits” by forcing a concrete image Americans can feel in their gut: borrowing from foreigners, or watching pieces of the country - shares, companies, property - drift into foreign hands.

Feldstein’s intent is less about moral panic than about constraints. He’s reminding a rich country with the world’s reserve currency that it isn’t exempt from basic accounting. Running persistent deficits means running persistent capital inflows. That’s not just a chart in an IMF report; it reshapes who collects interest, who earns profits, and who has leverage when policymakers need to raise rates, stabilize markets, or weather a crisis.

The subtext is political: “trade” isn’t merely about factory jobs or tariff theatrics. It’s about national balance sheets and the long-term distribution of claims on American income. The phrasing “has to” is doing heavy lifting - it frames adjustment as inevitable, not optional, and hints at a future where the U.S. pays more of its output to service past consumption.

Context matters. Feldstein came of age in the era when the U.S. shifted from creditor to debtor (post-1970s), and he watched deficits balloon alongside financial globalization. His warning is a classic economist move: take a popular slogan (“we can afford it”) and quietly flip it into a question of who owns what, and for how long.