I agree with you moondoong we can overanalyse economics as to why trade deficits don't matter but it is fairly simple, our income does not cover our expenditure so we borrow. And eventually creditors must get paid. We run record trade deficits during a commodity boom, our terms of trade are fantastic at this point of time but what happens if conditions deteriorate? we still do what we always have, dig it up and ship it off, let another country value add and we buy it back. Export iron ore import steel for example. Hmm doesn't seem very bright.
Our investment in future proofing our economy, with innovation, education and science, is woeful. Long term we are frittering away our natural advantages.
