More than one kind of damaging domino effect is possible if Greece is forced to abandon the euro
Stocks appear to be flying too high in light of the enormous number of risks that the U.S. economy faces over the next 12 months.
Mediocre growth, overly cautious corporations and government cutbacks figure to stifle employment gains until there is some comprehensive economic policy
All courses of action appear to lead to an eventual financial crisis of some sort. But moderate progrowth policies are the best bet to minimize the damage
The euro has survived a string of disasters, from the banking crisis in Ireland to the real estate collapse in Spain, as well as nonstop economic chaos in Greece. But now the common European currency faces an even greater threat, one that it may be unable to overcome: Democracy.
Policy experts complain that America has been slow to address its long-term economic problems – and unrealistic when such issues are actually discussed. But there has been even greater evasion and denial when it comes to the ethical dilemmas that will accompany those economic problems, especially where healthcare is concerned. Politicians talk as though relatively painless solutions can be found. But in reality there is no magical escape from difficult choices – they can only be dealt with by facing up to them squarely.
Most discussion about a potential breakup of the Eurozone assumes that Greece and other financially troubled countries would be the ones who ended up abandoning the common euro currency. But there’s a compelling alternative to that conventional wisdom – that the true problems of the Eurozone could be best addressed if Germany were the one to leave, accompanied, perhaps, by a few other rich countries.
Whatever the Supreme Court decides about President Obama’s plan, the future of health care presents daunting economic challenges that won’t easily be resolved
The most recent Greek bailout appears to be successful. As a result, worries about the European financial crisis have diminished somewhat. Indeed, European Central Bank president Mario Draghi has said that the worst is over for the Euro currency zone. Such optimism may be premature, however. Not only does Greece remain a long-term financial concern, but in addition Portugal is on track to become a second big problem.
Financial documents released by the Federal Reserve on Tuesday showed that 2011 was the second-most-profitable year for the U.S. central banking system. Net income totaled $77.4 billion, down only slightly from $81.7 billion in 2010. That’s more than twice what the Fed was earning before the 2008-09 financial crisis. It’s also more than double the amount earned by Exxon, Microsoft or Apple. Where does all this money really come from, who ends up paying for it, and where does it go?
