Social Sciences and History / Unit 15 SSH 1404 short lesson, about 20 seconds
Neither Good Nor Bad: What the Capital Buys
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The idea
Trade surpluses guarantee no economic health and trade deficits no weakness; either can work out well or poorly depending on how the capital is invested. A borrowing country that puts the money into productivity-boosting investment can improve its long-term growth.
In practice
Borrow to build, then repay.
Where people slip
A deficit spent on consumption is the poor case.
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