Just to underscore the seriousness of the NZ current account deficit of 8.3% of GDP, I read an artcle tonight by Professor Peter Morici from the University of Maryland about the dangers of the US current account deficit which currently sits at a far more sedate 5.4% of GDP.
Although he does a great job of laying out the consequences of the deficit and attributes the responsibility for it to the US Government, he doesn’t actually say how they should go about reducing it. I have written to him to ask him to clarify this point.