B B The second important risk to our recovery, as I mentioned, is the domestic fiscal situation. As is well known, U.S. fiscal policies are on an unsustainable path, and the development of a credible medium-term plan for controlling deficits should be a high priority. At the same time, fiscal decisions should take into account the fragility of the recovery. That recovery could be endangered by the confluence of tax increases and spending reductions that will take effect early next year if no legislative action is taken. The Congressional Budget Office has estimated that, if the full range of tax increases and spending cuts were allowed to take effect--a scenario widely referred to as the fiscal cliff--a shallow recession would occur early next year and about 1-1/4 million fewer jobs would be created in 2013.3 These estimates do not incorporate the additional negative effects likely to result from public uncertainty about how these matters will be resolved. As you recall, market volatility spiked and confidence fell last summer, in part as a result of the protracted debate about the necessary increase in the debt ceiling. Similar effects could ensue as the debt ceiling and other difficult fiscal issues come into clearer view toward the end of this year.
When you are here what do you do? A company can go BK and be sold for pennies on the dollar. Nations do not want to go BK for currency is then but worth pennies on the dollar though interest rates become extremely high. You read BB concerns and know he will try to stimulate but you also know we have been doing this for some time. Short range solutions that are knocking the heck out of us in the long range haul. Take heed Germany it is not working.the world needs a Einstein in Econ.
Wall Street Journal Updated July 17, 2012, 8:33 a.m.
BY TOM FAIRLESS AND TAPAN SHARMA MANNHEIM, Germany—German economic expectations fell for a third straight month in July to hit the lowest level since January, according to a closely watched survey, and may now have reached bottom.
The Center for European Economic Research, also known as ZEW, said Tuesday its economic expectations index fell to minus 19.6 in July from June's unrevised minus 16.9, above the consensus forecast for a drop to minus 20.0. July's slower decline may signal a turnaround, said ZEW's head of research development Michael Schröder.
The "very small" change in July after June's dramatic drop reflects survey participants' view ... |
