U.S. as Debtor
By Arnold Kling
Ken Rogoff, former chief economist of the International Monetary Fund, finds it odd that the United States is a borrower rather than a lender in international capital markets.
Isn’t it even stranger that this borrowing includes sizable chunks from countries such as India and China, many of whose 2.3 billion people live on less than a dollar or two a day
Even with the morality of it all set aside, pure self-interest ought to dictate that the United States be a net lender to the rest of the world rather than a borrower. We are an aging population that ought to be saving for retirement in real assets abroad.
For Discussion. Rogoff does not make any specific policy proposals. He allows that with our economy operating below potential, now is not the time to restrain consumption. In the mediurm term, what policies would increase national saving in the United States?