Of course, even if it does not narrow the current account deficit by much, reducing the budget deficit would be highly desirable for other reasons: It would free up resources for private investment, and it would reduce the burden on future taxpayers of repaying the federal debt. 2.
Decline in the private saving rate  For observers who view the large current account deficit as an example of the profligacy of Americans, the sharp decline in private saving rates looms as large in their thinking as the sharp rise in the budget deficit.