The US economy and global imbalances

Stephan Roach of Morgan Stanley lands some stiff left jabs when it comes to playing the blame game (leading up to the joint IMF-WB meetings) for the current US account deficit and global imbealances. [Blame is placed on the legislative branch and the Federal Reserve.]

America is to blame in shaping its own destiny. Sadly, that destiny is now manifested in the form of record excesses in the US economy. That’s true of the national saving rate, the current account deficit, household sector indebtedness, the consumption share of GDP, and the bubble-prone state of asset markets. As a result of these excesses, the US now accounts for fully 70% of the world’s imbalances — well above any measure of its share in the global economy.

Ouch. Where I stand in all of this, Yes we hold alot of the blame, Yes it does not look good in the immediate future, Yes we can dig ourselves out, Yes we need to save more as individuals and on a whole.

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