Although it fell short of the record $223.1 billion deficit in the final quarter of last year, the U.S. current account deficit, the broadest measure of the country's international economic standing, deepened to $218.4 billion in the second quarter of this year, the U.S. Commerce Department reported on September 18. The current account deficit was $213.2 billion in the first quarter of this year.
The current account includes U.S. international trade in goods and services, income from U.S. investments abroad and payments to foreigners on their investments in the U.S.
"In the second quarter, the current account deficit was 6.6% of GDP and was financed largely by borrowing from foreigners, as opposed to foreigners investing in productive assets in the United States," says Peter Morici, a professor at the University of Maryland's Smith School of Business in College Park. "The Chinese and other governments are essentially bankrolling the U.S. consumer."