But this strategy has yielded disappointing results. In part, this is because we ended up waiting much longer than expected. Furthermore, as the waiting went on and domestic growth kept slowing, loose policy settings became not simply a response to slow growth but also one of its causes.
As the post-Crisis period dragged on without a robust global recovery, persistently large fiscal deficits caused our debt-to-GDP ratio to almost double.3 By importing large quantities of savings from the rest of the world and then exporting revenue to pay the interest, our current account widened to become very large, exceeding 6% of GDP in some quarters.