We need to talk about the trade deficit.

That's the current account balance, in technical economic speak. It's the sum of all goods, services, and investments flowing out of America to other countries, and from other countries into America. If the balance is positive, America is exporting more goods, services, and investments than it's importing. That means we have a trade surplus. If the balance is negative, America is importing more than it's exporting, and we have a trade deficit.

Now, when a rich country that's already highly developed is trading with a poor country that's trying to develop, textbook economics says a very specific thing should happen: The rich country should run a trade surplus, and the poor country should run a trade deficit.

There's a pretty straightforward reason for this: Poor countries have very little wealth to spread around. So if they're going to build up their national infrastructure and their technology, and still feed, clothe, and house their people at the same time, they need to bring those resources in from outside. Hence, a trade deficit.

Another way to look at it is this: If one country is running a trade deficit with another country, the first country must, as a matter of mathematical necessity, also be a net borrower from the second country. The first country is buying stuff from the second country, and giving them nothing but its own currency in exchange, so the second country must wind up holding more assets in the first country's currency. Which all makes sense: If a poorer developing country is bringing in resources from outside, it's going to be borrowing more than investing with its own money. And the rich countries have the money to lend.

The U.S. is definitely rich, and poorer countries across Latin America, Africa, and Asia are certainly trading with us in order to become rich, too. And yet this is America's current account balance:

It's completely backwards! We're importing more from the world than we're exporting. Despite being incredibly wealthy, we're net borrowers. What's even crazier is that some of those developing countries in Asia, Latin America, and Africa have been net lenders to America. There's a reason that economists Dean Baker and Monique Morrissey titled their study on this phenomenon "When Rivers Flow Upstream." It makes no sense, yet it's happening.