The point here is not that deficits don't matter, but that the willingness of capital to flow across national boundaries seems to have greatly increased. Hence, notions of what was sustainable that were predicated on observations from an earlier era of limited capital mobility proved not to be very useful in making predictions.
4  BIS Review 12/2006  been a more balanced global path with smaller current account deficits and surpluses would almost certainly have been a weaker one for all countries. As it was, policy-makers in the US (and a number of other countries) sought to combine full employment and price stability by allowing domestic demand to run ahead more strongly.