Source:
New York TimesBy LIZ ALDERMAN
Published: November 3, 2010
PARIS — As Republicans prepare to assert new authority in the U.S. Congress following the midterm elections Tuesday, the United States’ allies overseas are concerned that the political upheaval in Washington may pose fresh challenges to the global economy.
Despite pledges to curb government spending and the huge U.S. budget deficit, Republicans are expected to address anxiety over unemployment and flagging growth by pushing hardest for an extension of the income tax cuts for everyone, including the rich that were passed during the presidency of George W. Bush — a move that would add to the deficit and, by extension, further weaken the U.S. dollar.
....
From the perspective of those outside the United States, “Republican claims to fiscal probity are a little difficult to buy into,” said Simon Tilford, the chief economist at the Center for European Reform in London. “What they’re advocating would probably increase the deficit rather than effect the dramatic reduction which they claim they want to bring about.”
....
Without a healthier U.S. economy, the shift in the economic balance of power toward emerging market nations is expected to continue. Even if U.S. growth were to remain at current levels, analysts said, faster-growing markets like China, Brazil and India are now the primary drivers of the global economy, a trend underscored in a report by the International Monetary Fund last month.
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http://www.nytimes.com/2010/11/04/business/global/04global.html?src=busln
Being driven over the cliff once wasn't enough. Now we get to be driven over the cliff a second time. Why has such a bad driver been handed the keys again?
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