News / Economy

Political Bickering Threatens US Economy, Again

Political Bickering Threatens US Economy -- Againi
|| 0:00:00
...    
🔇
X
July 25, 2012 10:21 PM
A year ago, many Americans were appalled when partisan bickering between opposition Republicans and President Barack Obama’s Democratic Party pushed the nation to the brink of default on its massive debts. The political gridlock prompted a downgrade of the U.S. credit rating. As VOA’s Jim Randle reports, the country now faces even greater financial problems in the midst of a hyper-partisan atmosphere as November's presidential election approaches.
Political Bickering Threatens US Economy -- Again
WASHINGTON — A year ago, many Americans were appalled when partisan bickering between opposition Republicans and President Barack Obama’s Democratic Party  pushed the nation to the brink of default on its massive debts.  The political gridlock prompted a downgrade of the U.S. credit rating.

The country now faces even greater financial problems in the midst of a hyper-partisan atmosphere as November's presidential election approaches.

During the debt ceiling debate, a popular newspaper portrayed leading politicians from the two parties as whining brats in diapers.  

Washington was nearly paralyzed by bickering as it tried to make tough political and financial decisions.

Economist Says US Is Bright Spot in Weak Global Economyi
|| 0:00:00
...    
🔇
X
Mil Arcega
July 25, 2012 11:35 PM
Financial markets stumbled this week as worries about a potential bailout for Spain, weakness in emerging markets, and a looming fiscal crisis in the U.S. gained momentum. Despite the increasingly negative outlook, a New York economist tells VOA the one bright spot may be the United States. Mil Arcega has more.
Related Video Report - Click to View
The squabbling prompted Standard & Poor's to make an unprecedented cut in the U.S. credit rating.

“There had been significant deterioration recently on both the political and fiscal front --  on the fiscal front, in terms of the government indebtedness as a share of the economy, and on the political side in terms of the willingness to arrest that deterioration,” said Nikola Swann, a key S&P analyst.

Economists say the polarization inherent to this year’s election campaigns could make Washington’s dysfunctional politics even worse.

Last year’s congressional debate focused on efforts to raise the legal limit on what the U.S. government can borrow to fund its deficits and debt.

The squabbling worried some investors even when It ended with a deal that put off some tough political and financial decisions.  

So Congress has to deal with the debt ceiling again and also agree on what to do about tax cuts set to expire at the end of this year.  

Without a deal, the government faces drastic spending cuts that will hit both the military and popular social programs.  

U.S. central bank Chairman Ben Bernanke says that could push the nation back into recession.

“If the full range of tax increases and spending cuts were allowed to take effect, a scenario widely referred to as the fiscal cliff, a shallow recession would occur early next year and about 1-1/4 million fewer jobs would be created in 2013,” Bernanke said.

Brookings Institution economic scholar Phillip Wallach says he expects that Democrats and Republicans in Congress will work something out, eventually.
 
“The Republican leadership compromised just enough to make sure they got a deal done at the last minute, and if you were [willing to make a wager] you would probably say that’s what will happen again the next time around because they don’t want to be responsible for plunging the economy into chaos,” Wallach said.

So Congress and the President have just a few months to finish the difficult task of reaching agreement on spending and taxes in ways that do not damage the economy.

You May Like

For Lebanon-based Refugees, Desperation Fuels Perilous Passage

In a war that has caused an estimated three million people to flee Syria, efforts to make perilous sea journey in search of asylum expected to increase More

South African Brewer Tackles Climate Change

Mega-brewer SAB Miller sent delegates to climate summit in Peru, says it is one of many private companies taking their own steps to fight climate change More

Indonesia Reports Increase in Citizens Joining Islamic State

Officials say more than 350 of its citizens are now in Syria or Iraq to fight with Islamic State - 50 more than last month More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Will Pakistan School Shooting Galvanize Pakistan Against Extremism?i
X
Ayesha Tanzeem
December 17, 2014 11:54 AM
The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video Will Pakistan School Shooting Galvanize Pakistan Against Extremism?

The attack on a military school in Pakistan’s northwest city of Peshawar left 141 dead, including 132 children. Strong statements of condemnation poured in from across the world. The country announced three days of mourning, and the leadership, both political and military, promised retribution. VOA's Ayesha Tanzeem looks at how likely the Pakistani government is to clamp down on all extremist groups.
Video

Video ‘Anti-Islamization’ Marches Increase Tensions In Germany

Anti-immigrant rallies in Germany have been building in recent weeks, peaking Monday night in the city of Dresden where tens of thousands of people turned out to demonstrate against what they call the ‘Islamization’ of the West. Germany has offered asylum to more Syrian refugees than any other country, and this appears to have set off the protests. Henry Ridgwell reports from London.
Video

Video Aceh Rebuilt Decade After Tsunami, But Scars Remain

On December 26, 2004 there was an earthquake in the Indian Ocean so powerful it caused the Earth’s axis to wobble a few centimeters. Onshore on the island of Sumatra, the resulting tsunami was devastating. A decade later, VOA Correspondent Steve Herman reports from Banda Aceh, Indonesia, where although there is little remaining evidence of the physical devastation, the psychological scars among survivors remain.
Video

Video Refugees Living in Kenya Long for Peace in the Home Countries

Kenya is host to numerous refugees seeking safe haven from conflict. Immigrants from Somalia face challenges in their new lives in Kenya. Ahead of International Migrants Day (December 18) Lenny Ruvaga has more for VOA News from the Kenyan capital.
Video

Video Turkey's Authoritarianism Dismays Western Allies

The Turkish government has been defiant in the face of criticism at home and abroad for its raids targeting opposition media. The European Union on Monday expressed dismay after President Recep Tayyip Erdogan lashed out at Brussels for criticizing his government's action. Turkey's bid to be considered for EU membership has been on hold while critics accuse the NATO ally of increasingly authoritarian rule. Zlatica Hoke reports.
Video

Video US-China Year in Review: Hong Kong to Climate Change

The United States is pushing for a code of conduct to resolve territorial disputes in the South China Sea as it works to improve commercial ties with Beijing. VOA State Department correspondent Scott Stearns reports on a year of U.S. policy toward China from Hong Kong to climate change.
Video

Video Japanese Leader’s Election Win Raises Potential for Conflict with Neighbors

Japan’s Prime Minister Shinzo Abe and his allies easily won a two-thirds majority in parliament Sunday, even though the country has slipped into recession under his conservative policies. VOA’s Brian Padden reports from Seoul, that the prime minister’s victory will empower him to continue economic reforms but also pursue a nationalist agenda that will likely increase tensions with Japan’s neighbors.
Video

Video Nuba Mountain Families Hide in Caves to Escape Aerial Bombings

Despite ongoing peace talks between Sudan's government and the rebel Sudan People’s Liberation Movement-North, or SPLM-N, daily aerial attacks continue in South Kordofan province’s Nuba Mountains. Adam Bailes was there and reports for VOA that government forces are targeting civilian areas, rather than military positions, with their daily bombardments.

All About America

AppleAndroid

World Currencies

EUR
USD
0.8033
JPY
USD
117.19
GBP
USD
0.6372
CAD
USD
1.1634
INR
USD
63.622

Rates may not be current.