For many years, some economists sounded like car alarms - warning incessantly about America's huge and persistent trade deficit.
Nothing happened, though. Unlike, say, in Argentina, Russia, or East Asia during the 1990s, no foreign nations demanded the United States take drastic action to shrink its deficits. The day of reckoning - if it ever was to arrive - seemed a long way off.
Now, there are indications that the world may be starting to lose patience with America's import profligacy and buildup in debts to foreigners.
Foreign interest in buying US stocks and bonds is slipping. May was the third consecutive month foreigners were net sellers of US stocks. Further, Japan appears not so keen on buying dollars to keep the price of the yen down, and thus help its exports be more competitive, now that the Japanese domestic economy has started to bustle. Recent monthly numbers suggest Japan, which already holds 16 percent of US Treasury bonds, is buying fewer of them.
Another telltale sign is the value of the dollar. An index that weighs its value against major foreign currencies shows the dollar down 19 percent since a peak in February, 2002.
That slow decline isn't all bad. It actually reduces the trade deficit by encouraging US exports (because they're cheaper to foreigners) and discouraging imports (because they're more costly to Americans). The real danger lies in a rapid decline. If foreign lenders become nervous, they could force the value of the dollar down precipitously and do real damage to the US economy.
So, is it time to listen to those sounding the alarm? Here's the case they make.
This year the deficit in the nation's current account will reach a record $600 billion, estimates Charles McMillion, president of MBG Information Services, a Washington economic consulting firm. That deficit measures the trade in goods, such as stereos and cars, as well as services, such as tourism and insurance - indeed most everything except the flow of capital, such as investments and foreign loans.
And this current-account deficit continues - to the tune of $1.1 million a minute. The cumulative deficit since 1990 in the US current account adds up to $3.1 trillion, Mr. McMillion calculates.
To finance the deficits, the US must borrow an equivalent amount, one way or another. These new debts are added to the nation's already massive foreign debts. It means more of the federal taxes Americans pay are being sent to central bankers in China, Japan, Taiwan, and to other foreign entities and individuals - now owning about 40 percent of Uncle Sam's debt.
Today's huge trade deficits are basically unsustainable, argues McMillion. He has good company in that view, including Paul Volcker, former chairman of the Federal Reserve.
This year's current account deficit is running in excess of 5 percent of the nation's gross domestic product, its total output of goods and services. That's a level many economists consider dangerous.
At some point - and nobody knows precisely when - too many foreigners may well say, "I've got enough dollar assets. I'm not going to buy any more. Maybe I will even sell some."
That, says McMillion, would likely raise interest rates in the US and thereby hurt the economic expansion. Americans would pay more to finance purchases of homes, cars, and other consumer goods.
The OPEC nations, seeing the purchasing power in Europe and Japan of their dollar-priced oil exports decline, could be tempted to raise the price of oil again. The restraint that cheap imports place on prices of goods sold in the US would weaken, perhaps boosting inflation. Many goods no longer produced in the US - such as cellphones, computer parts, and flat-panel screens - would become more expensive.
The alarmists have been wrong before. America is all right as long as foreigners continue to want to hold more US assets. But it's also true, as McMillion points out, that the trade deficit has made the US economy more vulnerable to an external shock - such as a terrorist attack or financial panic.