In the United States, putting fiscal policy on a sustainable path is a critical step toward increasing national saving in the longer term. Higher private saving would also help. And resources will need to shift into the production of export- and import-competing goods.
Some of these shifts in spending and production are already occurring; for example, China is taking steps to boost domestic demand and the U.S. personal saving rate has risen sharply since 2007. In the near term, a shift of the international regime toward one in which exchange rates respond flexibly to market forces is, unfortunately, probably not practical for all economies.