America Avoids a Debt Crisis
Thanks to its masterful monetary policy, the Federal Reserve has given Congress a great window of opportunity to get its fiscal house in order.
Thanks to its masterful monetary policy, the Federal Reserve has given Congress a great window of opportunity to get its fiscal house in order.
U.S. debt passes a sad milestone. But the situation is not much better in Europe.
The U.S. Congress has ignored the budget deficit for decades. Debt investors have almost run out of patience. Will Congress address the problem—or continue to play for time?
The latest policy statement from the euro zone’s central bank is a harsh message to all governments that have budget problems.
If Congress decides to compensate NATO for insufficient European funding, they may have a run-in with the investors on the market for U.S. government debt.
Finally, the U.S. Treasury is doing something to curb the rise in debt costs. But is it too late already to prevent a fiscal crisis in America?
After months of falling, U.S. interest rates are rising again. There is no apparent economic reason for this, which suggests that investors are worried about government solvency.
The EU’s new fiscal rules are supposed to solve the problem with member state budget deficits. But so far, neither the European Parliament nor the European Council has addressed the two biggest problems with their reform efforts.
With their economy in a recession, the Bundestag may be forced to subject the Germans to harsh austerity policies, whether they want it or not.
The growth in debt will only stop when the U.S. government is struck by a real fiscal crisis. Nothing else will work.
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