Your are correct that:
1. The trade deficit does not create debt. It sends financial assets overseas. I reduces the Net Asset position of the U.S.
2. The growth of the U.S. economy is creating Net Wealth much faster than we are shipping assets overseas.

It follows that as long as sentence #2 is true, the U.S. will be able to pay for our trade deficit with financial assets, without incuring debt.

However, the capacity of the U.S. economy to continue to create financial assets faster than they are being sent overseas is not guaranteed.

In 2005, foreign stock markets grew faster than the U.S. stock market. If that reality continues, the U.S. is in trouble. Only by maintianing a stock market growing in value faster than other overseas options, do we entice investors to keep money in the U.S. stock market.

The trouble, for the U.S., of the large trade deficit, is that foreign sellers of goods to the U.S. use the receipt from their exports to increase their capacity to sell more exports cheaper. They are in a positive feed-back cycle.

The capacity of U.S. firms to sell not only overseas, but in the U.S., is being destroyed daily by successful foreign producers.

The U.S. could continue to participate successfully in international trade if it had the supporting conditions to gain control of the financial aspect of international trade. Current trends show London and Switzerland and tax havens around the world, including some oil exporting rulers, are cutting the U.S. off from that option.

Wealth creation in the U.S. is at risk by continuing the trade deficiit.

I repeat my post here, because it is still valid.

Dear sir,
I can show you where’s the debt. Take your Fred example. If he’s the average American, he then makes 50,000 USD a year, but spends 53,500 USD.
Hence the trade deficit, which is just the difference between what you make (GDP, or Fred’s 53.500) and what you spend. The difference is currently 7% of GDP (or 3,500 USD for Fred).
Hence, Fred has 3,500 USD new debt this year, on top off all the debt he already has. Fred also needs to pay interest over his debt. If you spend more every year than you make, that is your personal trade deficit, and you accumulate debt, that needs servicing (= pay interest, or dividend when the Chinese invest in an US company; and the Chinese and other foreigners only do that to get more USD out than they invest now!)

So, the current account deficit(currently almost identical to trade deficit) means that the US are accumulating more and more debt (or, in macro economic terminology: the Net International Investment Position is negative and growing).

This means that the US needs to pay more and more interest. High consumption in the current years needs to paid off, with interest, by future generations.

[1] In the tiny bit of JW teachings I couldn’t avoid as a child, it sure sounded like they were ready to join Jesus’s army at the Battle of Amageddon – so they weren’t pacificists, they just didn’t want to accidentally wind up on the wrong side. As for the flag thing, the JW’s claim “The Pledge of Allegiance” is tantamount to idol worship…

Germans were sent to camps when there was evidence of their disloyalty. Not all of these were actually disloyal, and innocent family members might have been sent to the camps along with the suspected men, but that in no way compares to herding off everyone of a certain ethnicity residing in certain states, with or without evidence. What makes the difference even more striking is that there were indeed organizations of German-Americans with links back to an enemy government, and Hitler had quite plainly attempted to use these links to recruit spies and saboteurs in the USA, a number of whom had been caught. In spite of being able to read most Japanese codes, our counter-intelligence had caught just one Japanese-American spy, and he had been recruited after returning to Japan. The group that was factually least threatening was rounded up en-masse.