Supercommittee Failure to Rein In US Debt Threatens Global Recovery
November 18, 2011
A so-called U.S. Congressional "supercommittee" has less than one week before a deficit-cutting deadline on November 23. Some economists say the prospects for success are poor while others say failure is not an option. Many are urging the bipartisan committee of six Republicans and six Democrats to make big changes to get the huge U.S. debt under control. Economists say failure could seriously hurt the world's largest economy, and countries that do business with it
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With an economy about one fourth the size of the world's GDP (gross domestic product), any threat to the U.S. economy is a potential threat to other countries that do business with it. Jason Peuquet, a policy analyst at the New America Foundation says it does not take a large economy to see how interconnected the world has become.
"We saw that one smaller country in the EU, Greece, could really almost bring down Europe and threaten the global economy," he said. "So if we can see that in just one smaller country, imagine what would happen in the world's largest single economy, the United States."
Some say U.S. debt - now edging close to $15 trillion - is growing too fast. That's why economists say the congressional committee tasked with trimming the nation's deficit must act decisively. Unless politicians deal with the problem now, Diane Lim Rogers, chief economist at the Concorde Coalition, says worries about the nation's ability to repay its debts will make the U.S. less attractive to investors.
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