In Defense of the US Current-Account Deficit

Last year, for the third year in a row, the US current-account deficit set a record-this time at more than $400 billion. Will this soaring deficit jeopardize the economy? We don’t think so. There’s nothing inherently good or bad about a current-account deficit or surplus. The rapid increase in today’s deficit merely reflects the extraordinary economic growth of the US economy during the 1990s as … [ Read more ]