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.

Related Video Report - Click to View

x
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

UN Watchdog Urges Israel to Probe Possible Gaza War Crimes

More than 2,100 Palestinians, most of them civilians, were killed in a 51-day war in Gaza, along with 67 Israeli soldiers and six civilians in Israel More

New Kenyan 'Thin SIMs' Poised to Transform African Mobile Money

Equity's new technology is approved in African nation for one-year trial, though industry leader Safaricom says thin SIMs could lead to data theft and fraud More

Solar's Future Looks Brighter

New technology and dropping prices are contributing to a surge in solar power More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Talks to Resume on Winter Gas for Ukrainei
X
Al Pessin
October 25, 2014 4:21 PM
Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Talks to Resume on Winter Gas for Ukraine

Ukrainian and Russian officials will meet again next week in an effort to settle their dispute over natural gas supplies that threatens to leave Ukraine short of heating fuel for the coming winter. VOA’s Al Pessin reports from London the dispute is complex, and has both economic and geopolitical dimensions.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.
Video

Video US ‘Death Cafes’ Put Focus on the Finale

In contemporary America, death usually is a topic to be avoided. But the growing “death café” movement encourages people to discuss their fears and desires about their final moments. VOA’s Jerome Socolovsky reports.
Video

Video Ebola Orphanage Opens in Sierra Leone

Sierra Leone's first Ebola orphanage has opened in the Kailahun district. Hundreds of children orphaned since the beginning of the Ebola outbreak face stigma and rejection with nobody to care for them. Adam Bailes reports for VOA about a new interim care center that's aimed at helping the growing number of children affected by Ebola.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.