Is the United States’ external deficit a concern?

The United States constantly has a n external deficit and is continuously building up external debt. This would be a concern and would fuel fears of a future external solvency problem and a collapse in the dollar if the external deficit results from a shortfall of household savings, a high level of housing investment and the current fiscal deficit (excluding investment). It would not be a concern if the external deficit results from an efficient productive investment effort, whether private or public, or from investment in new technologies. We find that the US external deficit results from both: Worrying causes: the low household savings rate, the high current fiscal deficit; But also reassuring causes: high levels of public investment, corporate investment and investment in new technologies.