Caixin OnlineOpinionMagazine Columnist谢国忠 Andy Xie Why the Global Economy Is Still Stuck
03.07.2013 17:38

Why the Global Economy Is Still Stuck

In the wake of the financial crisis, policies the world round remain focused on the wrong things, especially speculation
By Andy Xie

The global economic news is not good lately. The Italian election was a statement against the austerity policy of the previous government, but failed to offer an alternative. The resulting uncertainty keeps Italy's government bond market on thin ice, threatening to engulf the whole euro zone in a new financial storm.

The U.S. government has been embroiled in a fight over something called "sequester" for weeks without a solution. The resulting US$ 85 billion cuts in government spending rekindle the risk of double-dip recession. The cuts are 0.5 percent of GDP and less than one-tenth of the United States' fiscal deficit. The big worries over them reflect the fragile state of the American economy after massive stimulus over five years and a dysfunctional U.S. political system.

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