PAM Perspectives Q1 2010
| 17 February 2010 |
Sovereign debt crises now the greatest threat to recovery?Sovereign debt crises from the developed world may now be the greatest risk to the still fragile economy recovery. Yet though immediate fears surround mainly the Greek debt crisis, and what may be an impending European sovereign debt calamity, the belief that either the EU—perhaps with the IMF—will provide a last minute bale-out is widespread.
Meanwhile, the US too has accumulated a gargantuan fiscal deficit three times what is generally regarded to be a sustainable level. Should we be more worried about the fiscal state of America or should we take Ronald Reagan’s line, arguing that “it is big enough to take care of itself”? |
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