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View Diary: Paul Krugman asks if the election will be honored (266 comments)

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  •  The economic issues that may compromise (6+ / 0-)

    ...the President at the end of 2012 and throughout his second term, are not going to come from within the United States. This changes the game for a total debtor nation, like the US. Belt tightening while fighting wars of aggression that burn 50 cents on the dollar won't make a bit of difference where it matters.

    I would anticipate (as does most of the world) that congress would continue to be paralyzed until 2016, which puts the nation in a vulnerable position, globally. It's a shame.


    A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

    by Pluto on Sun Sep 30, 2012 at 07:57:09 PM PDT

    •  how paralyzed are you thinking? (3+ / 0-)
      Recommended by:
      NoMoreLies, Pluto, KJG52

      One option is complete paralysis: Clinton tax rates are restored, and the sequester happens. That should solve the mid-term deficit, but also create a mild recession.

      The other option is paralysis on continuing the Bush tax cuts at the current rate (not sure what would happen to the sequester). That option would leave a huge deficit, and may or may not be a recession depending on the sequester.

      But either result, honestly, is probably better than what Europe is doing, since the Europeans seem determined to destroy their economy.

      •  It's hard to isolate it from geopolitics (4+ / 0-)
        Recommended by:
        fuzzyguy, ferg, jayden, Laconic Lib

        ...but I read it as a decline across the board. It will hit the US harder simply because its banks were allowed to take destructive financial positions after 2009. They are now holding $231 trillion(!) in outstanding derivative positions. Most of those will resolve, but not nearly enough to avoid making the dollar an international pariah.

        This from a foreign think tank:

        The US political system’s current and future impotence in facing its deficit problems combined with "sequestration " of the Federal budget, the effects of which are already making themselves felt throughout the US economy, will turn the coming weeks into an endless succession of bad economic news  … against a backdrop of increasingly less well-managed geopolitical challenges.

        It only took just a year for all the perverse effects of the 2011 Western attack on Libya to appear: from the assassination of the United States ambassador to Libya to the anti-US riots throughout the Moslem world.

        Even the “back-yard” of the United States (according to the Monroe doctrine), namely Latin America, has rejected multi-decade US geopolitical positions.

        Further, Europe's accelerated integration de facto constitutes an ousting of US influence at the heart of European construction. Beginning in 2013, the IMF (i.e. Washington) will certainly be never invited again to deal with intra-Europe problems as it is the case today with Greece.


        A child of five would understand this. Send someone to fetch a child of five. -- Groucho Marx

        by Pluto on Sun Sep 30, 2012 at 08:34:37 PM PDT

        [ Parent ]

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