The already shaky European economists are staring in disbelief, but fascinated, too, at the slowly unfolding trainwreck in Washington. Let us see what they say:
“WE HAVE a system of government in which everybody has to give a little bit.” So said Barack Obama at the start of this week. But parse that sentence. Does the president mean that America already has a system in which everybody has to give a little bit? Or does he mean only that it ought to have such a system? It is not too much to say that the country’s economic well-being hangs on the answer. (read more)
Move over Nero: legislators on both sides of the Atlantic seem as if they can hardly summon up the energy to fiddle while their economies burn. In Europe, a chronic lack of co-ordinated action early in the financial crisis means the very survival of the euro is now in serious doubt. In the US, the crisis is potentially more serious: if Republicans and Democrats cannot agree on a deficit reduction plan by the 2 August deadline for raising the debt ceiling, the world’s largest economy will be in default.(read more)
Washington’s rancorous deficit-reduction talks resumed yesterday amid dire warnings from Wall Street and open rifts in the Republican leadership – but with no sign of a deal to raise the government debt ceiling and avert an unprecedented and potentially disastrous default by the United States government.(read more)
A dangerous game is being played by politicians in America. Republican negotiators are refusing to raise the cap set by Congress on the amount of debt the government in Washington can legally borrow. The United States hit its $14.3 trillion “debt ceiling” in May and the Obama administration has been juggling the finances since to continue to pay the daily bills. But on 2 August it will run out of room to do that. America will have to default on some of its due payments.(read more)
This is our Open Thread, What do you think and what else is on today?