Hamish McRae: At last the US is getting serious about tackling its budget deficit
Published 22/06/2011 | 05:00
IT IS not just Greece that is struggling with a yawning budget deficit. We, of course, are doing so, as indeed is much of the developed world. But the biggest fiscal deficit among the larger nations is that of the US -- biggest, that is, in relative terms at around 11pc of GDP. And the US has done nothing about it.
But the mood is changing, as became clear during a visit to Washington over the weekend. Indeed, this week is the moment when the serious debate on what to do has begun.
Up to now, the US has seemed almost insouciant about its debts. Some commentators are still calling for an even bigger deficit to "jump-start" the recovery and are genuinely puzzled that other economies seem to be creating new private sector jobs despite fiscal retrenchment, whereas the US, despite higher published growth figures, is failing to do so.