The U.S. Current Account Deficit – – Threat or Way of Life?
At the end of 2008, the U.S. current account deficit was $706 billion. This was much lower than the high in 2006 of $803 billion. The recession and dollar decline has lowered imports. However, the deficit is still is nearly 5% of the $14.2 trillion U.S. Gross Domestic Product (GDP), a level that would be of concern to most countries. (Source: Bureau of Economic Analysis, U.S. International Transactions) For example, the European Union does not allow any of its members to have a deficit over 3% of GDP. Germany imposed an additional sales tax in 2007 to lower its deficit so it can return to EU standards. Many experts say that the deficit is unsustainable and that the unwinding of this deficit is the greatest single threat to the global economy. Others st
