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According to Peter Hartcher's report, there are seven of the most serious crises in the world. The one he listed as the last one is the economic stagnation. He may think it is trivial compared to those crises in North Korea, Iran, Iraq and Afghanistan. If you read some articles published by some economists in the United States recently, you may have a different opinion.
Even though the economy seems to be recovered from the financial crisis this year, the unemployment rate was still stuck at as high as about 10 percent in August in US. Some experts even think the true figure is much higher than this.
That is not the only thing which concerned economists. According to the basic principle of economy, any government should maintain balance between income and expenditure. As an individual, if your debt is much bigger than your income, you will become bankrupt. The same rule should apply to governments. However during the financial crisis, around the world, from Australia to Europe and US, a huge amount of money has been spent in terms of “stimulus package”. Part of it has been proven to be wasted, for example the Home Insulation Program in Australia.
After the financial crisis, the debt of the US has reached $14.3 trillion dollars. The interesting thing is that as the richest country in the world, US has become the biggest net debtor and as the biggest developing country, China has become the biggest creditor of US. How can the US government repay the debt? One way is through tax. However, in a democratic country, if any president attempts to force the people to pay more tax, the people will force the president to step down because nobody really wants to tighten his belt.
So people start to doubt if the US economy is still the strongest one in the world but nobody doubts that the US still has the strongest military. If the US use their military to repay their debt, that will be the biggest crisis to the world.