Here’s a prediction: The political party that controls the White House after January could, four years later, be out of power for a generation. The economic challenges are that daunting.
I’m not talking just about the fiscal cliff or America’s “budgetary crystal meth” habit, as financier Bill Gross recently described Washington’s inability to contain today’s exploding debt.
The risk stems from something more fundamental: The globalization model of the past 30 years is cracking up. And there appears to be no new model to replace it.
Since April, an ugly economic world has turned uglier. The annual growth rate of total global exports has collapsed.… Seguir leyendo »
The euro zone crisis is back. Policymakers in those nations worry that they have entered a vicious cycle. Efforts at reform to demonstrate fiscal rectitude are leading to a weaker economy. The austerity medicine appears to be killing the patient.
For euro-zone policymakers in particular, the issue of austerity is awkward. That is because some of the periphery countries in the area of fiscal policy have, to put it bluntly, a history of cooking the books. They deserve the bitter medicine.
Yet not all nations are created equal. As economist Laura D’Andrea Tyson noted recently in the International Economy magazine, in 2008, Spain and Ireland were “models of fiscal rectitude” in their public debt exposure.… Seguir leyendo »