Hi Mala! I can look at the breakdown of the balance of payments in future pieces, but I do know that the biggest driver of the current account deficit has been the trade deficit. In 2006, the trade deficit peaked at about $750 billion while the current account deficit hit "only" $200 billion. So, on balance, everything else was positive... A deflating currency (which the Fed is engaged in) should help ease the trade deficits, but not without creating other problems in the economy (i.e. mis-allocation of capital).

In place of QE3, I would prescribe free markets. For starters, impose some form of trade balance mechanism (e.g. Buffett's fixed exchange vouchers, Gold standard, etc.). My work suggests that trade balance would produce about 7-9 mm new jobs in the US. Reduce gov't spending to get fiscal budgets in balance. And eliminate easy money to get balance back between savers and lenders. The current trajectory is a road to nowhere.