Author: Martin Wolf

From FT:

Niall Ferguson is not given to understatement. So I was not surprised by the claim last week that the US will face a Greek crisis. I promptly dismissed this as hysteria. Like many other high-income countries, the US is indeed walking a fiscal tightrope. But the dangers are excessive looseness in the long run and excessive tightness in the short run. It is a dilemma of which Prof Ferguson seems unaware.

Prof Ferguson stated that, according to the White House projections, gross federal debt will exceed 100 per cent of gross domestic product by 2012; that the US is forecast never to run a balanced budget again; that monetary policy, not deficits, saved the economy; that higher interest rates are on the way; and, not least, that high fiscal debt is damaging.

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• Niall Ferguson: The Next Greece? It’s The US!
• David Walker: The Greece Crisis Is Coming To America In 2012
• Is The Federal Reserve Secretly Bailing Out Greece?

History is sort of repeating itself, says the FT’s Martin Wolf.  The ‘Noughties’ of the 20th Century marked the end of a global super-power and led to wars, depressions, and hell…

“History does not repeat itself, but it rhymes,” as Mark Twain is supposed to have said. The noughties of the 21st century now have the same fin de regime feeling as those of a century ago.

Then the US, Germany, Russia and Japan were on the rise; now it is China and India. Then it was the Boer war; now it is the wars in Iraq and Afghanistan. Then it was an arms race between Germany and the UK; now it is the military build-up in China. Then the protectionism of the US undermined liberal trade; now conflicts between the US and China undermine our ability to tackle climate change. Then the US was isolationist; now China and other rising powers demand untrammelled sovereignty…

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See Also:

• It’s Time For Governments To Issue Stock Instead Of Just Borrowing
• Teflon Buffett Has Fired 21,000 People This Year
• Government Screwing Savers, Retirees To Keep Secret Wall Street Bailout Going