The world's largest and richest economy belongs to the United States (“North America,” 2011). Interestingly, this same monstrous economy also holds the title of the largest current account deficit. The US current account deficit is financed by net foreign capital inflows and has continued to grow over the past two decades (Holman, 2001). Economists in the early part of this century theorized that this enormous external deficit of the United States was sustainable because it would gradually correct itself and in a few years the deficit would be reduced, but this was not the case (Holman, 2001). The United States, continually fueled by foreign investment, has become a net debtor nation. The unique position the United States holds in the world economy allows the country to have persistent external deficits, but this is not a safe practice. To protect itself from sudden shifts in foreign confidence, the United States must strive to minimize the deficit by formulating a strategic plan to prioritize spending and avoid perpetual damage. The US current account deficit is the result of the nation importing more than it exports or consuming more than it produces (Ott, n.d.). The current account is a subaccount of the balance of payments, which is a method of tracking economic interactions with other countries (Carbaugh, 2011). The other subaccount of the balance of payments is the capital and financial account. A current account deficit means there is a surplus in the capital and financial accounts, and vice versa. A country is considered a net debtor when the money in the current account is less than that in the capital and financial account. Furthermore, this net debtor label means that foreign...... half of the document ......e 6, 2011, from http://www.dbresearch.de/PROD/DBR_INTERNET_DE-PROD/PROD0000000000180032.pdfNord America: United States. (2011, June 6). CIA - The Book of World Facts. Retrieved June 9, 2011, from https://www.cia.gov/library/publications/the-world-factbook/geos/us.htmlOtt, M. (n.d.). International capital flows. Library of Economy and Freedom. Retrieved June 9, 2011, from http://www.econlib.org/library/Enc/InternationalCapitalFlows.htmlWalker, D. (2008). The four deficits of the United States. Brown Journal of World Affairs, 14(2), 165-173. Wheelan, C. (2010). Naked economics: undressing the sad science. New York, NY: W. W. Norton & Company, Inc. Wray, L. R. (20009). Deficits matter: foreign loans to the Treasury. Roosevelt Institute. Retrieved June 9, 2011, from http://www.rooseveltinstitute.org/new-roosevelt/do-deficits-matter-foreign-lending-treasury