Had I as many souls as there be stars,

I’d give them all for Mephistophilis.

~ Doctor Faustus

Spectators claim Satan himself appeared on stage during the opening performance of Christopher Marlowe’s play Doctor Faustus (1588)—the grisly specter drove men mad with fear.

Some wanted to demolish the theater, others to hang Marlowe for his occult summoning. In spite of this controversy, or perhaps because of it, the play was a hit. Why?

Exquisite language? Perhaps. Lines like “the face that launch’d a thousand ships” have haunted readers for centuries. But time rarely preserves art for art’s sake. What survives is useful. The story of Doctor Faustus is no exception.

The plot is simple: Faustus sells his soul to Satan in exchange for the demon Mephistopheles’ service for twenty-four years. Faustus dreams of wealth: I will “wall all Germany with brass . . . fill the public schools with silk” and “live a life of all voluptuousness.” In the end, Faustus wastes his power, and Satan takes his soul.

The tragedy of Doctor Faustus contains an important lesson worth heeding: never trade tomorrow for today.

Unfortunately, that is exactly what America has done. America has run a trade deficit every year for the last forty years. Last year, the trade deficit was approximately $1.2 trillion. The cumulative value of these deficits, accounting for inflation, exceeds $28 trillion. This is a national emergency.

How do we pay for deficits? By selling assets, like real estate, and debt.

And why is America selling her very soul? Because, like Doctor Faustus, her appetite for imported “voluptuousness” exceeds our rational expectations. Her hedonistic love of today overshadows her fear of tomorrow.

America is Faustus—and we are running out of soul to sell.

Si peccasse negamus, fallimur, et nulla est in nobis veritas

There are four—and only four—ways for a country to acquire foreign goods.

The first way that a country may obtain foreign goods is through tribute. Tribute simply refers to products received by one country from another country without a reciprocal exchange of value, either now or in the future. Essentially, tribute is a free lunch.

Relatively modern examples of tribute would be China’s “panda diplomacy,” where the Chinese government gifted pandas to foreign zoos (China now charges $1,000,000 a year for a pair of giant pandas, in case you were curious). The Statue of Liberty is another good example.

Needless to say, tribute barely moves the $1.2 trillion trade deficit needle.

The second way that countries can acquire foreign goods is by trading.

That is, countries may exchange currently produced output for currently produced output. For example, Argentina sells steaks to America in exchange for automobiles. If the value of steaks and automobiles is equal, then trade is balanced, and no further balancing payment is required.

Of course, a country’s output is not limited to goods, and therefore, our discussion of the trade deficit has until this point been somewhat misleading. America exports both goods and services. As we have discussed, a good is a physical commodity—something that you can touch, taste, or smell, like a brick, an apple, or a bottle of perfume. Goods can be owned, stored, and consumed by the buyer after they are produced.

A service, on the other hand, is not a physical product that can be owned, stored, or consumed later. Instead, a service is something that is intangible, which is usually produced and consumed simultaneously. America runs a global surplus in services, so this shaves off a portion of the deficit.

Overall, America’s goods and services trade deficit is worth $918 billion.

Homo fuge: yet shall not Faustus fly

The third way that countries acquire foreign products is by selling past output, something that was made in the past but retains value today, i.e., assets. A good example of an asset is a house. The production of a house made in 1973 would contribute towards America’s GDP in 1973, but not today.

However, the house—or perhaps more accurately, the land it sits on—retains value and can be sold in the current year to buy foreign products. This sale would not count towards America’s GDP, nor would it factor into the trade deficit; however, it is an integral component of the balance of payments.

When discussing international trade, many economists contend that trade deficits do not exist because they are only one half of the balance of payments—they are simply a part of a larger equation.

For example, Professor Steve Hanke of Johns Hopkins University writes that “the U.S. trade deficit… is just the mirror image of what is happening in the U.S. domestic economy. If expenditures in the U.S. exceed the incomes produced in the U.S., which they do, the excess expenditures will be met by an excess of imports over exports (read: a trade deficit).”

What Hanke and other liberal economists fail to recognize are the practical consequences of running a trade deficit. Although the books are balanced on paper, reality shows us that it matters how they are balanced—there are two sides to every coin, but heads is not tails. This is one of the many economic myths that I debunk in my book, Reshore: How Tariffs Will Bring Our Jobs Home & Revive the American Dream.

Every year, America sells billions worth of assets to pay for the trade deficit—everything from Iowa’s best farmland to shares in New York’s largest companies. For example, in 2024, foreigners bought an estimated $42 billion of residential real estate, $8 billion of agricultural land, and $12 billion of commercial real estate.

In addition to real estate, Americans also sell ownership of our businesses. As of June 2023, foreign investors own some 17 percent of all American equities. Ownership of our businesses has dire consequences, such as giving foreign governments direct access to our technologies. This perpetuates the massive theft of American intellectual property, which is estimated to cost the nation up to $150 billion every year.

Fourth, Americans sell debt. This is sort of like buying groceries on our credit cards, except it is occurring at the national level. For example, foreigners own some $8.67 trillion of U.S. Treasury securities, accounting for 24 percent of the public debt. Further, America’s corporate and household debt has ballooned since 1973 to its highest levels since World War II.

Debt is especially dangerous because we have to repay both the principal and the interest. This inflates the cost of buying foreign products in a way that most economists fail to appreciate. Consider that in 2006, America became a debtor nation for the first time since the Great Depression. As a result, we are now paying over $150 billion in interest every year to foreign entities for the privilege of buying the products we should be building.

Lente, lente currite, noctis equi!

When Doctor Faustus sacrificed his immortal soul for temporal delights, he did so not because he was stupid, but because he was smart.

America’s best and brightest have likewise deluded themselves into thinking that they can tame the offshoring vicious cycle. Our politicians ignore the problem, while our economists distort logic to justify our greed.

However, like Faustus, America cannot obtain an infinite supply of imported voluptuousness for free. We must trade something, be it our past or our future, our sovereignty or our soul. Unless we change our course, we will be forced to accept our fate like the lamentable doctor:

Curs’d be the parents that engender’d me!

No, Faustus, curse thyself…

[for thou hast] depriv’d thee of the joys of heaven.