America must brace itself for turbulence

[katty]

http://www.ft.com/cms/s/0/10612eec-24cc-11e0-a919-00144feab49a.html#ixzz1BiGcA9Vz


America must brace itself for turbulence
By Peter Orszag

more: http://www.ft.com/cms/s/0/10612eec-24cc-11e0-a919-00144feab49a.html#axzz1BiGQApJU

Published: January 20 2011 22:51 | Last updated: January 20 2011 22:51

America is experiencing the hard slog of recovering from the financial crisis. Prospects have turned more positive over the past two months. But a year ago growth was picking up too – and then it stalled, at about the same time Greece’s fiscal problems infected the global economy. The question now is whether a home-grown fiscal crisis could derail this year’s rebound.

Some analysts have reached dramatic conclusions, suggesting the near-certainty of hundreds of billions of dollars in government defaults within the US over the next 12 months. Such predictions will undoubtedly turn out to be substantially overblown. Yet the rejection of one extreme is not the affirmation of the other. International investors would be wise to pay close attention to fiscal trends within the US.

The severity of fiscal risk varies considerably depending on which level of government is under discussion. At the federal level the combination of ongoing weakness in the labour market and large structural budget deficits means that the right policy mix should be more stimulus now and much more deficit reduction, enacted now, to take effect in two to three years.
.

[thaddeus_flowe]

1. Thank you Peter Orzag

"The bigger problem, though, lies beyond 2011, as the unsustainability of the federal government’s fiscal trajectory becomes increasingly clear. I hope it does not ultimately require a crisis to restore fiscal sustainability at the federal level, but I fear it will."

hope and fear.

[katty]

2. o yes more crisis to come

[thaddeus_flowe]

4. Couldn't Agree More

I also think that politicians and other public figures seem to be kicking the dirt and averting their gaze from real systemic failure, as they point fingers over non-issues and continue to encourage the catatonia, the dilated pupils of the people. The world is changing so rapidly, but many are caught as deer in headlights, insects in amber.
After our infrastructure and currency fail, what then will people do, what will they think?
Even today, if I suggest any solutions of military cuts or social welfare to otherwise reasonable people; I get called a communist and spurned from this quasi-debate.

yes, yes more crisis will come.

we live in interesting times.

[pscot]

3. He's warning his fellow bankers

that they've been sowing the wind.

[Kennah]

5. Anyone for TARP II?

And a crying orange boner.

[saras]

6. Turbulence?

:rofl:

All four engines are on fire, the wings are cracking at the fuselage, the tail is long gone, the cabin is full of hijackers who want to take us to Armageddon, the flight attendants are all huffing jet fuel and smoking PCP, the goddamned plane is full of goddamned snakes, and they're worried about TURBULENCE?

:rofl:

[martymar64]

7. And the pilot is on mescaline and the copilot is drunk