If nearly all observers agree that an adjustment of the U.S. current account deficit is inevitable, few agree on when the adjustment will occur and what will cause it to happen. Many argue that U.S. households must raise to a more prudent level a saving rate that has fallen to less than 3 percent of disposable income in recent years.
Others place the onus of adjustment on foreign economies to boost lackluster domestic demand and increase their purchases of U.S. exports. While some call upon coordinated governmental action to address the pattern of global external imbalances, others place their faith in market mechanisms to do the job.