It scored the cover of the New York Times Sunday Magazine, Paul Krugman’s feature, CAN EUROPE BE SAVED? And a quick read may have left American readers feeling reassured. At least Americans aren’t in the Europeans’ fix with their common currency, enduring safety net, shared responsibilities and all that socialisty stuff.
Focus tightly enough on Europe and it’s just possible to ignore what’s really making business news. Namely us. Last week the World Bank warned of “serious tensions and pitfalls” ahead in the global economy, and less than three percent growth for the U.S. That came on the heels of the news that the U.S. could lose its triple A credit rating if the national debt keeps going up.
The U.S., in case you haven’t noticed, has become a debtor nation, borrowing to finance war, private healthcare, bank bailouts, and did I mention low taxation. While the Times would have readers worry about Europe, Europeans have noticed the obvious: the U.S. and in particular U.S. super rich and corporations are under-taxed.
As the BBC chief economics correspondent — actually my sister, no radical — noted, “looking at the numbers, and America’s dysfunctional politics, if investors ever started to question America’s creditworthiness or seriously sell the dollar, it could make the bailouts on the European periphery look like a tea party.” And not Sarah Palin’s sort.
“Dysfunctional” refers to efforts to cut yet more taxes — the top item of the lame duck and of the new Congress. Your Congress is at work — driving your economy into a ditch and default. But don’t worry. Or if you must worry, worry about Europe.