The Great Rebalancing

The Great Rebalancing

In Lockhart's view, American economic history over the last quarter century can be divided into three periods: the Great Moderation, the Great Recession, and what he calls the Great Rebalancing, which is now underway. As the economy continues to recover from the recession, Lockhart sees three rebalancing processes now underway: rebalancing of consumption and savings, fiscal rebalancing, and regulatory rebalancing.
• Lockhart believes that higher savings rates and more measured consumer spending will make the U.S. economy less dependent on consumption and will help rebalance the country's external accounts. He thinks fiscal rebalancing is mostly ahead of us and public pension reform is a necessary element of fiscal correction. Also, as regulatory rebalancing continues, Lockhart sees the need for striking the right balance in all regulated sectors.