Columbia International Affairs Online: Working Papers

CIAO DATE: 01/2006

Getting Serious about the Twin Deficits

Menzie D. Chinn

September 2005

Council on Foreign Relations


Menzie D. Chinn has performed an invaluable service. He examines the fiscal and current account deficits, explains how we arrived at them, challenges the notion that they are sustainable, and puts forward an agenda for remedying the situation. He explains how and why the twin deficits constitute an important foreign policy issue—and how and why the United States must act lest the dollar, a primary element of U.S. economic strength and political influence in the world, be undermined. The result is an educational and practical study that deserves to be read widely and carefully.

This Council Special Report by Professor Chinn is the first in the Bernard and Irene Schwartz Series on the Future of American Competitiveness, and it was produced by the Council's Maurice R. Greenberg Center for Geoeconomic Studies. The Council and the center are grateful to the Bernard and Irene Schwartz Foundation for its support of this important project.