The hidden truth: the country with the reserve currency of the global economy will always, in fact must, run trade deficits. Think about the situation from the point of view of other economies. They have to get reserve currency in order to acquire goods and services.
Imagine my surprise, and wistfulness at not having gotten paid, to see today's NYT piece on just that subject. And about the same conclusion. Well, sort of.
Bernstein paraphrases a Treasury economist (Kenneth Austin) who has published an essay in The Journal of Post Keynesian Economics, here (it's not open, alas). The notion of post Keynes usually means full bore Randian, but not in this case:
Post-Keynesian economists are united in maintaining that Keynes's theory is seriously misrepresented by the two other principal Keynesian schools: neo-Keynesian economics which was orthodox in the 1950s and 60s -- and by New Keynesian economics, which together with various strands of neoclassical economics has been dominant in mainstream macroeconomics since the 1980s.
In any case, neither Bernstein nor Austin (filtered by Bernstein) defend the notion of the reserve country having to be a net debtor, only that the level of its currency circulating can, more or less, be under its control. As events stand now, they both argue the USofA is at the world's economies' mercy.
The Unfortunate Alternative is hard specie, and one need only read up world, and USofA, economic history from the 19th century through the Great Depression to see how foolish that is. If you think the world is not level now, you ain't seen nuthin yet.