Exceeded only by the pathological dread of imports that affects all nations is a pathological yearning for exports. Logically, it is true, nothing could be more inconsistent. In the long run imports and exports must equal each other (considering both in the broadest sense, which includes such “invisible” items as tourist expenditures and ocean freight charges). It is exports that pay for imports, and vice versa. The greater exports we have, the greater imports we must have, if we ever expect to get paid. The smaller imports we have, the smaller exports we can have. Without imports we can have no exports, for foreigners will have no funds with which to buy our goods. When we decide to cut down our imports, we are in effect deciding also to cut down our exports. When we decide to increase our exports, we are in effect deciding also to increase our imports.
It is true that under a gold standard differences between imports and exports could be settled by a direct transfer of gold, which was unlikely to be artificially stopped by the receiving country: gold was and remains widely recognised as residual international money. However, these balances could just as easily be settled by shipments of any other commodity.
The idea that nations should make bad loans to other countries so they are able to purchase their exports is emotional and muddle-headed. When loans are not repaid, goods have been given away. It is the difficulty inherent in tracing the cost of bad public loans and the benefit to particular exporters which hides the cost of the policy.
No nation can get rich by making bad loans to support exports. Similar arguments apply to export subsidies.