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Is the United State's current account deficit a problem for the economy?

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The media and others suggest that the current account deficit run by the U.S. is a problem for the economy. What do you think? What action(s) would you advise federal government officials to take on this issue?

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This solution states that the current account deficit run by the US is a problem for the economy and why in 216 words.

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Yes, the current account deficit run by the US is indeed a problem for the economy. The current account deficit in USA is due to excess spending in the economy and also caused by government borrowing which leads to a escalation in Aggregate Demand and thus growing demand for imports. A escalating current account deficit is thus, sign of ...

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Sandeep Bardia, MBA
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  • MBA, Rochester Institute of Technology
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