[Globe & Mail, Canada]

[Click Here for Jumbo Version]

 

 

Die Zeit, Germany

U.S. Risks 'Plunging World' Into New Financial Crisis

 

"Stock markets would probably respond with shock. The entire world would feel the consequences. ... That's the frightening thing about America's 2011 'summer theater.' We can no longer take for granted that politicians will do the obvious. Donít they see the harm they are conjuring up? Seen from abroad, this seems like reckless behavior to say the least."

 

By Christoph von Marschall

†††††††††††††††††††††††††††††††††† †††††††††††††

 

Translated By Stephanie Martin

 

July 7, 2011

 

Germany - Die Zeit - Original Article (German)

President Barack Obama: Body language experts would have no trouble detecting that this man is under stress.

 

WHITE HOUSE VIDEO: President Obama gives his perceptions of debt crisis talks with Republicans, July 11, 00:41:33RealVideo

The clock is ticking relentlessly. If Congress doesn't act, in three weeks the United States may not be able to pay all of its bills. The government will then have to decide whether it should stop interest payments on loans and go into default, cease paying social security benefits or furlough government employees. Stock markets would probably respond with shock. The entire world would feel the consequences. Never before has the largest free market on earth had to explain its incapacity to cover its debts.

 

Congress can prevent that. Democrats and Republicans must agree to raise the debt ceiling and allow the government to borrow more money. But both camps will only agree under certain conditions. Republicans are demanding: save, save, save and no tax increases. Democrats say: No cuts in social services and higher taxes for the rich. So far there is no consensus in sight. Agreements that were discussed on Friday no longer applied on Sunday.††

Posted by WORLDMEETS.US

 

Thatís the frightening thing about America's 2011 "summer theater." We can no longer take for granted that politicians will do the obvious. Donít they see the harm they are conjuring up? Seen from abroad, this seems like reckless behavior to say the least. Republicans and Democrats both insist on maximalist ideological positions, thus risking plunging the world into a new financial crisis.

 

Upon closer inspection, however, both sides have good reason for their tough stances. The responsibility for oneís own country takes precedence over responsibility to other countries. The U.S. must economize - not just a little, but quite a lot. On this issue, the Republicans are in the right. One third of current U.S. expenditures are now financed by new loans. The total debt has reached $14.3 billion - which is 100 percent of America's gross domestic product. The primary reason: tax revenues fell dramatically during the financial crisis.

 

 

SEE ALSO ON THIS:
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'
Rzeczpospolita, Poland: Who Can Replace America as the World's Policeman?
Kayhan, Iran: Instead of Celebrating July 4, Obama Should Repent for Flight 655
The Nation, Pakistan: Seeing the Fourth of July Through Pakistani Eyes
Yezhednevniy Zhurnal, Russia: Why Unlike U.S., Russia Lacks Holiday to Freedom

 

Bookmark and Share

 

However, it would be an illusion to assume that all one has to do is to wait for the next economic upswing and everything will work as it did before. It will take America years to emerge from this crisis. That is why, in addition to cutting expenditures, balancing the budget will require higher revenues - revenues that should be raised by raising taxes and eliminating tax cuts on the rich. Here the Democrats are in the right.

 

In the end, Republicans and Democrats will probably reach a consensus. But we canít be sure. There remains a residual risk that ideology will trump responsibility.

 

CLICK HERE FOR GERMAN VERSION

blog comments powered by Disqus

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Posted by WORLDMEETS.US July 14, 4:39am]

 







Bookmark and Share