Curtis: Is the world closer to the edge of the ‘fiscal cliff’ today than it was in 2008?

By: /
29 October, 2012

No, the world is nowhere near a “fiscal cliff.” While the U.S. fiscal/debt situation as of January 1, 2013 has been described by some in the media as a potential “fiscal cliff,” a newly-elected president and a slightly more reasonable House of Representatives will quickly come to some accommodation – likely a version of the Simpson-Bowles recommendation of two years ago – and the U.S. will resume its slow economic recovery. The deleveraging in that country is about over after six or seven years. U.S. economic growth will be strong by mid-decade, led by exports and resumed consumer spending. China and other BRICs will outpace western growth, including that of the U.S., but not by the sharp differential that has characterized the past half-decade. The so-called fiscal cliff will be forgotten in months.