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The Yomiuri Shimbun, Japan

For World's Sake, Obama Must 'Provide Leadership' on U.S. Debt


"Given the complicated politics of the presidential election, we wonder whether the two sides will be able to agree on effective measures to cut the deficit. The president must provide leadership and get the U.S.' fiscal house in order. Both houses of Congress also have a very grave responsibility."




Translated By Ryuichi Sato


August 2, 2011


Japan - The Yomiuri Shimbun - Original Article (Japanese)

Chairman of the House Budget Committee Paul Ryan: Still licking his wounds from criticism following the release of the "Ryan Budget," the apparent victory of the Tea Party in debt ceiling talks has given added impetus to he and the rest of the U.S. Republican leadership.


FINANCIAL TIMES VIDEO: Prepare for new round of quantitative easing after deal to raise U.S. Debt ceiling, Aug. 1, 00:04:50RealVideo

President Obama has reached an agreement with Republican and Democratic leaders to raise the debt ceiling of the U.S. government. The U.S. federal debt was projected to reach its statutory limit of $14.3 trillion (about 1.1 quadrillion) on Tuesday. We welcome news that a last-minute compromise has been reached and that the worst-case scenario of default on U.S. Treasury bond payments avoided.


Should the U.S. government fall into default, market confidence in the world's key currency, the dollar, would plunge. U.S. Treasury bonds held by major countries and financial institutions around the world would then plummet, throwing financial markets into major turmoil.


Apparently out of a sense of relief, dollar-selling pressure on foreign currency markets has eased, halting at least temporarily the recent sharp appreciation of the yen against the dollar. Stock prices on the Japanese and other Asian markets rose across the board. Further stability in the financial markets would be desirable.


According to Obama, the agreement includes deficit reductions of $2.4 trillion over 10 years, while allowing the administration to raise the debt limit on a similar scale in two stages.


Initially, spending cuts of $900 billion would be imposed while the debt ceiling is raised by the same amount. Then a bipartisan "super committee" to be established by Congress will work out a plan to cut the deficit by another $1.5 trillion within the year, while again raising the debt limit by a matching amount.


On the basis of the accord, both houses of Congress should pass the bill quickly and Obama should sign it into law. From now on, the focus should be on the new bipartisan committee and its deficit cutting plan.


The Tea Party wing of the Republican Party which made a breakthrough in last year's midterm elections, opposes tax increases. With the president seeking both to cut fiscal spending and raise taxes, the Democrats and the Tea Party are far apart.


Given the complicated politics of the presidential election, we wonder whether the two sides will be able to agree on effective measures to cut the deficit. The pros and cons of tax increases will likely become a major bone of contention.





If negotiations devolve into acrimony with Republicans and Democrats locked in a tug-of-war - or if deficit-cutting measure end are judged insufficient - credit-rating agencies may still decide to downgrade U.S. government debt - raising fears of the impact on world markets.


The president must provide leadership and get the U.S.' fiscal house in order. Both houses of Congress also have a very grave responsibility.


Meanwhile, the appreciation of the yen continues, with the currency in record 76 yen to the dollar territory, causing hardship for the Japanese economy.


The yen's rise puts pressure on the earnings of exporters, hindering Japan's economic recovery. If Japanese firms accelerate overseas production abroad to cope with the yen's rise, it would bring about a hollowing-out of Japanese industries.


We hope Japanese companies will maintain domestic production and work out strategies to deal with the super-strong yen. The government should expand its support.


CRI, China: U.S. Must Consider 'Defects' in its Democratic System
UNT, Sweden: U.S. Must Choose Practical Patriotism Over Party Tactics
FTD, Germany: Take Decisive Action on Debt Ceiling! Do it, Barack!
La Jornada, Mexico: The 'Grand Debt' of U.S. Families
Jornal Do Brasil, Brazil: American Default and the End of 'Zero Risk'
The Telegraph, U.K.: World Needs America to Come to its Senses
El Pais, Spain: Playing Chicken is the World's Newest Sport
Mainichi Shimbun, Japan: U.S. Must Prevent Another 'Made in U.S.' Disaster
Yomiori Shimbun, Japan: U.S. Lawmakers Should 'Stop Playing Political Games'
Yezhednevniy Zhurnal, Russia: The U.S. and Soviets: Pyramid Builders to Raiders
Frankfurter Rundschau, Germany: 'Radical' Republicans Threaten U.S. with Ruin
Tiscali Notizie, Italy: The Fiscal Decline of the 'Apocalypse'
News, Switzerland: Notion: 'Pay Politicians Based on Performance'
Salzburger Nachrichten, Austria: Debt Ceiling Attack By Republicans 'Backfires'
Gazeta, Russia: America's Astonishing 'Battle for the Ceiling'
People's Daily, China: U.S. Game of Chicken Threatens Creditors and Economy
Die Zeit, Germany: U.S. Risks 'Plunging World' Into New Financial Crisis
O Globo, Brazil: Global Economy Hangs on 'Mood' of U.S. Voters
The Telegraph, U.K.: Down on the Fourth of July: The United States of Gloom
Financial Times Deutschland, Germany: For Americans, a Dour Independence Day
Financial Times Deutschland, Germany: Who Cares about the U.S. Economy?
Folha, Brazil: U.S. Conservatives Threaten to Plunge U.S. into 'Lost Decade'


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[Posted by WORLDMEETS.US Aug. 3, 11:59pm]


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