Newman: Is the world closer to the edge of the ‘fiscal cliff’ today than it was in 2008?
How close is close?
Without the governments of the United States, the United Kingdom and the major eurozone counties riding to the rescue of their banking systems after the Lehman Brothers collapse, the world would have gone over a fiscal cliff.
Now the World is facing a different scenario, perhaps only slightly less potentially disastrous.
Unless the President of the United States and the American Congress reach an agreement that cancels the tax increases and spending cuts scheduled to take effect in January, those tax increases and spending cuts will topple the U.S. into a deep recession and take the rest of the world with it.
And unless the eurozone can stabilize Greece and Spain, and probably Italy and Portugal as well, and keep the common currency intact, Europe will go into a deep recession taking the rest of the world with it.
One cliff. Two cliffs.
How close is close.
