Monday 24 July 2017

Global events must keep us on our toes

TURMOIL in financial markets is a daily occurrence. Yesterday was different because the turbulence sprang from such an unusual source.

The Standard and Poor's credit rating agency gave a "negative" rating, not to some debt-burdened, misgoverned small country but to the rich and powerful United States. Yet the reason was simple and predictable. The US has a staggering public deficit. It is one of only three countries in the developed world -- the others being Ireland and Japan -- with a deficit of more than 10pc.

Both President Barack Obama and his Republican opponents in Congress recognise the need for dramatic action. Both propose budget cuts amounting to an astronomical $4 trillion. But they are divided on the timescale and the method of achieving the cuts. In particular, the Republicans dislike any proposal for tax increases.

Please sign in or register with Independent.ie for free access to Opinions.

Sign In

Don't Miss