Professor Williams has another clear lesson in economics and free trade in his October 18th column.

He explains trade deficits like this:

When I purchase $100 worth of groceries, my goods account (groceries) rises by $100, but my capital account (money) falls by $100. That means there’s really a balance in my trade account. By the same token, my grocer’s goods account (groceries) falls by $100 but his capital account (money) rises by $100, also a balance in his trade account.

Which makes sense. We buy goods, we get something for our money, and the producers are able to either produce more or invest the money in other things. And by buying the cheapest available goods I now have more money to buy more goods from more people. I don’t see the problem.