ABSTRACT
Nineteen eighty-nine marked the seventh consecutive yearly increase in the real gross national product (GNP) of the United States, making the current recovery one of the longest in our nation's peacetime history. Yet the expansion has proved as remarkable in its imbalances as in its longevity. Contrary to previous experience, the structural federal deficit rose sharply as the economy rebounded, the real rate of interest climbed to highs not sustained since the Great Depression, and large trade deficits transformed the United States from the world's largest lender to the world's largest debtor.
