Even though I am a business journalist, I just love politics. Since the fall of Bear and Lehman, the interconnectedness of politics and the private sector has never been so tightly wound. Congress comes back on September 14th and its going to be exciting for folks with politic-itis. I read a great article Sunday morning looking at how the Democrats are going to assess how they should tackle the slowly growing economy in order to gain votes.( ci_15995785 )
We had Representative Paul Ryan on Squawk Box last week talking about the joblessness in America and we also spoke about the GOP’s march to take back the House and possibly even the Senate. ( ?video=1581731344&play=1 )
I like speaking with Ryan. He is one of the members in Congress who I think has a handle on what’s going on today. Unlike some of the GOP members who just bash the Democrats for basically being Democrats, Ryan offers compelling reasons on solutions to fix this economy.
I think Americans are tired of the blame game and the childish name calling both sides are guilty of. We want action. Let’s face it, many people are expecting another Uncle Sam bailout but Uncle Sam’s wallet is empty and his credit line is beyond max. Not since 2001, has the US seen its debt-to-GDP ratio double to 66 percent. But the scarier part is some experts are predicting we might be heading toward 100 percent. Many US consumers lived that way a few years ago in the boom-boom days of credit buying homes they couldn’t afford and using their homes as ATM machines draining all the equity out of it. That worked out real well right? So Uncle Sam, if outrageous spending on the American consumers part got us into some of the mess we are in now, does that mean you are made of rubber and the problems of overextension will not hurt you?
Spending is just part of the US economic worries. The jobs picture is still a muted grey. Roubini said at the Annual Ambrosetti Forum in Italy “Conditions in the U.S. labor market are awful…” And U.S. GDP growth might be as low as an annualized 1 percent, which will make “it will feel like recession for most people.”
But the US is just a small part of this global recovery. IMF’s Lipsky says the world economy is moderately recovering but still faces challenges, urging the need for medium-term fiscal consolidation.
It takes courage and intelligence to choose the right fiscal course. Europe is trying to figure out its mess. This week we will hear from the President on how to jump small business and jobs. Let’s hope partisan politics can be put aside and both sides come up a plan that is just about the main goal and no other hidden agendas are put in to make one side look bad if they don’t vote for it. There is no room for pork in an economic recovery plan.