What’s Different About Today’s Government Deficit and Debt?
As of today, the U.S. government’s current deficit and debt are indeed currently at unprecedented levels for peacetime—once we account for them appropriately.
With vast sums committed to bank recapitalization and our own stimulus programs in the West, the pivotal role of China in the recovery of the global economy, such as it is, from the depths plumbed last autumn (and again this March) tends to be overlooked somewhat. But China's truly massive programs, which far outpace ours in terms of percentages of GDP, are full of desperate gambles and contradictions that these four articles document.
First, from The Financial Times' John Authurs,
Next, a piece on Beijing's dollar conundrum and strategy.
Third, Michael Pettis on how lower US debt-fueled consumption will force China into a significantly lower growth trajectory.
Finally, Reuters on China's hidden debts.