The Economy: Unbalanced Balance

THE ECONOMY Unbalanced Balance

Apart from inflation at home, which seemed to preoccupy Washington last week, the U.S.'s most stubborn economic problem of 1966 is proving to be its eight-year-old balance of payments deficit. Directly or indirectly, that deficit—the excess of dollars spent abroad over dollars earned there—has already helped stall negotiations for world monetary reform, caused U.S. corporations to invade the European market for dollar bonds, prompted Charles de Gaulle to keep cashing in France's dollars for U.S. gold at a $33 million-a-month clip. Last week the Administration got more bad news:...