Over the past decade, the global economy has been on a dynamic path that is clearly unsustainable with ever-increasing current account deficits in the US financed by surpluses in emerging market economies. In its latest report, the authoritative CEPS Macroeconomic Policy Group explores the link between the US deficits and the global savings-investment equilibrium. They find that the US deficit is likely to be even larger than officially reported and that policy-makers do not seem willing to undertake the necessary policy adjustments to reduce it. Nevertheless, a reduction in the global supply of savings may in any event force an increase in global interest rates and thus a slowdown in US domestic demand, thus initiating a gradual reduction in US deficits. They argue that a key responsibility of US policymakers is to allow this process to happen to avoid the risk of a disruptive adjustment later.