News / Economy

Economic Turbulence Forecast for 2012

There are encouraging signs for the world's largest economy as 2011 comes to an end. American consumers are spending more, the housing market is improving, and employers are laying off fewer workers.

But the unresolved debt crisis in Europe, the slowdown in China and U.S. spending cuts pose a serious challenge for policy makers as 2012 begins.

High unemployment in the United States, rising debt and Congress' inability to do anything about it were major stories in 2011.  But some bright spots are emerging as the year comes to a close, according to George L. Perry, a senior fellow for economic studies at the Brookings Institution.

"One was the export sector which grew really very well. Another area was construction outside of home building. Business construction was picking up and construction in particular areas like commercial."

U.S. unemployment is at its lowest level in more than two and a half years, and consumer confidence is rising. But there are dark clouds ahead as the New Year begins.  China, the world's fastest growing economy, is slowing down, and Europe's debt crisis shows few signs of easing.  

"We export a great deal to Europe," Perry points out. "And if Europe falls into another recession, that export growth is going to end. And that will affect jobs in the U.S. and cause the U.S. to move towards recession."

Rising inflation and the slowdown in Chinese manufacturing have already curbed demand for some commodities.  But the slowdown is due in part to Beijing's efforts to prevent its economy from overheating, adds Perry.

Reflecting on the global uncertainty, World Bank President Robert Zoellick urged Europe and its biggest trading partners to act responsibly.

"Europe has to rescue Europe, okay? And it's very important. If there's any message when I'm asked, 'Well, what can the U.S. do and what can China do?' The best thing they can do is clean up their act at home, be a source of growth at home, and, secondly, be a source of confidence to the market."

Zoellick is encouraged by ongoing reforms in China aimed at reducing the country's reliance on exports, but he warned U.S. lawmakers against further delays in dealing with the nation's rising debt, now close to $15 trillion.

"The downgrade of America from triple A didn't affect the finances today, but it may be one of those events people look back on 10 years from now and say, 'Did they get the warning? Did they pay attention or did they continue to do what they were doing?'"

Unless leaders are willing to make the tough decisions needed to stabilize the global economy, Zoellick and many leading economists say problems in Europe, the U.S. and China could coalesce into a "perfect storm" in 2012 that could rival the financial crisis of 2008.

You May Like

EU Court Fines Poland for Hosting CIA 'Black Sites'

Ruling is first time a court has acknowledged suspects were held and tortured at the sites, under US program launched following the 9/11 terrorist attacks More

Migrant Issues Close to Home Spur Groups to Take Action

Groups placing water, food in the desert, or aiding detainees after release, have one common goal: no more deaths of migrants crossing illegally into the US More

Video At AIDS Conference, Prevention Pill Stirs Excitement

Truveda shows promise, spurring debate over access and other approaches More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Treatment for Childhood Epilepsy Heats up Medical Marijuana Debatei
X
Shelley Schlender
July 24, 2014 6:43 PM
In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video Death Toll From Israel-Gaza Conflict Surpasses 700

Gaza officials say a shelling hit a compound housing a United Nations-run school in the Gaza Strip, killing more than a dozen people, during an Israeli offensive in the area. Heavy fighting between the Israeli military and Hamas militants continued on Thursday, pushing up the death toll. So far, more than 730 Palestinians and 35 Israelis have been killed in the conflict. VOA's Scott Bobb has the latest from Jerusalem.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video Israel Targets Gaza Supply Tunnels

The Israeli military has launched a ground operation in Gaza to destroy the myriad tunnels that may have been used to smuggle weapons to Hamas. VOA's Zlatica Hoke reports that could mean more hardship for the people of Gaza, who obtain some of their essential supplies through these underground passages
Video

Video Researchers Target Low-Cost Avatar Technology

Scientists at the University of Southern California Institute for Creative Technologies say 3-dimensional representations could revolutionize social media. Elizabeth Lee has more from Los Angeles.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.
Video

Video In Cambodia, HIV Diagnosis Brings Deadly Shame

Although HIV/AIDS is now a treatable condition, a positive diagnosis is still a life altering experience. In Cambodia, people living with HIV are often disowned by friends, family and the community. This humiliation can be unbearable. We bring you one Cambodian woman’s struggle to overcome a life tragedy and her own HIV positive diagnosis.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.