Observers feared that, at some point, investors would decide they had enough dollar assets in their portfolios and pull back abruptly from financing the burgeoning U.S. current account deficit, triggering a sharp decline in the dollar, a spike in interest rates, and widespread economic distress. Discussions among policymakers at that time focused on reducing current account imbalances to stave off such stresses.
3 The United States was encouraged to increase national saving, both public and private. Countries with persistent current account surpluses were encouraged to reduce their dependence on external demand by implementing structural reforms to boost domestic demand, including investing in social programs and infrastructure and reforming labor, product, and financial markets.