A tourist gazes up towards the dome of the U.S. Capitol in Washington January 25, 2010.
Kevin Lamarque / Reuters

Even as efforts to recover from the current crisis go forward, the United States should launch new policies to avoid large external deficits, balance the budget, and adapt to a global currency system less centered on the dollar. Although it will take a number of years to fully implement these measures, they should be initiated promptly both to bolster confidence in the recovery and to build the foundation for a sustainable U.S. economy over the long haul. This is not just an economic imperative but a foreign policy and national security one as well.

A first step is to recognize the dangers of standing pat. For example, the United States' trade and current account deficits have declined sharply over the last three years, but absent new policy action, they are likely to start climbing again, rising to record levels and far beyond. Or take the dollar. Its role as

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  • C. FRED BERGSTEN is Director of the Peter G. Peterson Institute for International Economics. He was Assistant Secretary of the Treasury for International Affairs from 1977 to 1981 and Assistant for International Economic Affairs to the National Security Council from 1969 to 1971. Copyright 2009, Peterson Institute for International Economics.
  • More By C. Fred Bergsten