Tuesday, August 2, 2011

After the debt, the stagnation threatens Obama

The White House and Republican and Democratic leaders of Congress have thus given birth to forceps, on the eve of the fateful date of August 2, agreement on raising the public debt of the United States. This deal, torn by President Obama, based on mutual concessions that everyone tries already to present to his advantage.

Barack Obama can claim to have achieved three successes. First, it has avoided the worst for his country - and the rest of the world economy. For now, the U.S. will not be declared insolvent and punished by the rating agencies. Rightly, he can plead his liability against the dangerous games that have engaged the Republicans.

He then forced his opponents that the defense spending are not immune to future budget constraints. Finally, he got a raise the debt ceiling sufficient, in principle, for looking beyond the presidential election of 2012, the vice in which the Republicans wanted to shut it again - a little - loose.

But the counterparties are heavy. This agreement is in fact a capitulation to the dictates of the Republicans, spurred by the Tea Party's radical crusade. The very advantageous tax the wealthiest Americans is not altered and it is the middle and lower classes that will be, more or less affected by budget cuts to come.

In addition, the completion of the main clauses of the agreement was assigned to a new "bipartisan commission" that must give its verdict at the end of November. But Republicans have derailed these commissions over the past two years, which is obviously not likely to restore investor confidence and markets.

Their first reactions are also not encouraging. In announcing the agreement of August 1 with the Congress, Barack Obama has assured that the "cloud of debt and the cloud of uncertainty hanging over the U.S. economy" and began to be "pushed". And he welcomed pouvoirrevenir to the point: "devote all our time" in the United States fairesortir their economic difficulties.

But the clouds on growth are as threatening, if not more. The world's largest economy is plunged into an stagnation (0.8% growth in the first half), which raised fears of a recession. The unemployment is structural: one way or another, the employment crisis affects 25millions Americans, especially young people.

The decisive question is therefore whether the agreement on the debt is likely to promote recovery or, conversely, to the sealing. For now, it just not cut whole sections of "major projects" the U.S. president. He also denies any new tax revenue, so any fiscal leverage to support growth.

A sixteen months of the election, this is not a good sign for the incumbent.

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