ABSTRACT
In a very real sense the balance-of-payments adjustment problem--both for the world and for the United States--in the 1958-67 period can be characterized as a struggle, both intellectual and real, to get the surplus countries of Western Europe to recognize that chronic surpluses were bad and to get the United States to reocgnize that chronic deficits were bad. For far too long, we continued to say three things: (a) our deficit was good for the world; (b) it really was not very important anyway; and (c) at the same time we apologized for being in deficit For far too long, Western Europe continued to say: (a) the United States should correct its deficit; (b) Europe had no responsibility for taking compensating action; and (c) proper demand management in the United States would do the whole job. 1
