It Is Unsound to Allow a Country Like the United States to Secure Automatic Financing of Its Deficits

RUEFF. This situation is the result of the use, over an extended period, of a well-known system, the gold-exchange standard. The result of the operation of this system is that, when the United States, for example, has a deficit, it pays dollars that are returned the same day to New York, where they are reinvested.

The deficit therefore does not affect the abundant supply of funds in New York; in this way, the deficits can continue indefinitely.

TRIFFIN. I agree entirely. Mr. Rueff has expressed, in a way to which I subscribe 99 percent, our two essential points of agreement. It is unsound to allow a country to secure automatic financing of its deficits.

--Jacques Rueff, The Monetary Sin of the West, trans. Roger Glémet (New York: The Macmillan Company, 1972), 108.