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On pages 346 348 in your International Economics textbook, Robert Carbaugh asks the the question, “Can the United States continue to run a current account deficit year after year?”

Carbaugh discusses the pros and cons of the U.S. government continually running a current account deficit.  His arguments for and against current account deficits are quite compelling.  Not only that, this question carries plenty of relevance being that we borrowed heavily to dig our economy out of recession.

I want you to re read these pages in the text (pg.346 348) and draw your own conclusions.  I would like for you to discuss in detail where you stand on this issue and give valid economic reasons why.

In your analysis of this discussion question, I want you to take into consideration the emergence of China and India as economic powerhouses.  Think about how these two countries’ bourgeoning middle classes may affect our current account. Please keep this an economic discussion and not a political discussion.

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