U.S. Takes One for the Team

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WASHINGTON: Back when the Japanese economy was something to be scared of, trade deficits half this size would give U.S. policymakers fits. Now, the U.S. deficit with the world has swelled to a record high of $16.8 billion, and Robert Rubin isn't batting an eye. "It's something the U.S. needs to do for the rest of the world," says TIME senior economics reporter Bernard Baumohl. "No one should be too concerned."

What the U.S. is doing, as it sits atop its economic Ararat, is lowering Asia a rope. Countries such as South Korea and Thailand, thankfully stabilized, still need massive exports to rejuvenate their domestic economies -- and the U.S., with not only its own economy but its credibility as a global pulpiteer at stake, has little choice but to open wide. For now. "In the long run, the deficit has to go back down," says Baumohl. "But the U.S. can stand it for a little while."