Too Much Savings Abroad?Here's an
interesting take on savings and trade deficits. Samuelson is one of those rare magazine writers who actually understands economics.
Like others, Bernanke warns that these trade imbalances—our huge deficits, their huge surpluses—seem dangerous. His contribution is to show that their main causes lie outside the United States. To say a country has surplus saving is simply another way of saying that it lacks good investment opportunities at home or discourages its citizens from consuming. Asian countries favor export-led growth, de-emphasizing local consumption. Latin America's volatile politics deters investment. Europe's heavy taxes and regulations do likewise. Whatever the problems, Americans can't fix them.
