Which is worse: the debt crisis and partisan bickering in the United States, or the debt crisis and dysfunctional confluence of national political systems in Europe? This editorial from Brazil’s O Globo asserts that despite the dark clouds over America, Europe lacks the historic dynamism and resilience repeatedly demonstrated by America.
The O Globo editorial says in part:
Although the wrestling match between the government and opposition in the U.S. has been the spark for this wave of pessimism, the world has in fact more reason to worry about Europe. The American economy has a recognized dynamism and an unmistakable capacity for resilience. Soon after the 2008 crisis, it was believed that loans and junk bonds would erode U.S. financial institutions – and that many of them would end up collapsing. This fear has disappeared, and it isn’t because of a lack of credit that consumers are pulling back.
In the European Union, difficulties that were once restricted to peripheral countries now extend to the bloc’s heavyweights – with no apparent solution on the horizon. And how is it that emerging economies are able to maintain rates of growth far beyond those in the United States, Europe and Japan? This is a new framework in which it remains impossible to venture a guess.
In this sense, the world will now be even more attentive to events in the United States; because only from there will a breeze capable of clearing the air of pessimism emerge. This will depend on an understanding between the government and Congress about the direction of public finances. Just like Brazil, the United States must improve its fiscal policies – a lot – to avoid a chronic fiscal deficit.
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