With the continuing discussion of the need for the U.S. and China to enter trade negotiations, it is important to understand that any negotiations will be about much more than trade. In my dreams, I can imagine the two countries working out a beautiful rebalancing—one in which the unsustainable excesses both countries now face are reduced to levels that are sustainable.

The problem as I see it is that both countries are currently stuck in an unsustainable cycle in which Americans buy massive quantities of inexpensive manufactured goods from China. These purchases are financed by the United States borrowing enormously from China so that China is now massive holder of U.S. debt.

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In the process of this cycle, the United States has lost its ability to manufacture effectively, which has contributed to the plight of the bottom 60% of U.S. earners, who have been losing ground economically and have become increasingly frustrated over many years. With nearly 60% of the U.S. population reading at only a 6th grade level, it is a significant challenge to training........

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