The Bankwatch

Tracking the consumer evolution of financial services

UK is ahead of US in tackling debt

Gillian Tett at the FT makes a profound point.  The US government and people have not seen nor sensed the international shock from the economic crisis that is plainly evident in Europe and in particular UK.  Osborne, Cameron and Clegg are on to something that is certainly months but probably years of the US situation with a lame duck government.

The American government are very caught up in politics or infighting.  This is not a good sign.

Drama needed to jolt Americans into tackling debt |

The US has hitherto faced extraordinarily little market pressure for fiscal reform. Instead, investors have continued to gobble up treasury bonds, even as US debt has spiralled. And though US yields have risen recently, this has not been dramatic enough to concentrate political minds.

Right now, US leaders certainly prefer it that way. But the rub is that without some form of external shock, there is little chance of an end to US political gridlock. Or, to put it another way, some drama is probably needed to concentrate political minds on the need for medium-term reform.

Written by Colin Henderson

December 20, 2010 at 03:38

Posted in Uncategorized

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