For the United States, a consequence of its current account deficit is a growing foreign ownership of the capital stock of the United States and a rising fraction of U.S.income that must be diverted abroad in the form of interest and dividends to foreigners.

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When a country runs a current account deficit, it means that it is importing more goods and services than it is exporting. To finance this deficit, the country must borrow from abroad, which results in a growing foreign ownership of its capital stock. As a result, a rising fraction of the country's income must be diverted abroad in the form of interest and dividends to foreign investors who own its assets. This is the consequence of a current account deficit and is true for the United States.

For the United States, a Consequence of Its Current Account