The US also has a big deficit on its capital account, which has made it the world's largest debtor nation.

BBC: US record trade deficit

What one can say, however, is that global economic stability calls for a gradual reduction in America's enormous current-account deficit (and its consequent heavy demands on the global capital market).

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PUNE--India's biggest economic concern is the current account deficit, because the government has to rely on volatile capital inflows to make up the shortfall, the chief economic adviser to the finance ministry said Tuesday.

WSJ: India Adviser: Current Account Deficit Biggest Concern

America, in turn, has been overly reliant on foreign capital inflows, so as to finance its record current-account deficit.

ECONOMIST: Currencies

According to Martin Neil Baily, a senior fellow at the Peterson Institute for International Economics in Washington, the "striking thing" about last year's report was that it painted a rosy view of the trade imbalance by focusing on the capital account surplus, rather than its inverse, the current account deficit.

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