When foreign dollar holders purchase new U.S. govemment bonds, they will have dollars to spend on U.S. items, including U.S, export goods. Hence, when our nation's govemment operates with a budget deficit, we should expect to see foreign dollar holders spending on U.S.-produced goods and services. As a consequence of the U.S. government deficit, therefore, we should generally anticipate U.Simports, or a U.S. trade deficit