Mt. Vernon Register-News

Opinion

October 19, 2013

America's not in decline, it's on the rise

(Continued)

Emerging economies were the darlings of the past decade, growing at an average of roughly 7 percent annually between 2003 and 2012. By some calculations, China was poised to surpass the United States in GDP by 2016.

Today, the picture couldn’t look more different. Brazil’s growth rate has fallen from more than 7 percent in 2010 to just under 1 percent. Likewise, Indian growth tumbled to about 3 percent in 2012, down from double digits as recently as two years earlier. Perhaps most pronounced, China’s government is revising down its official growth targets. Analysts are no longer asking whether there will be a Chinese economic slowdown but rather how hard the landing will be.

Morgan Stanley has identified five particularly fragile emerging-market currencies: Brazil’s real, India’s rupee, Indonesia’s rupiah, South Africa’s rand and Turkey’s lira. Those countries are vulnerable to high inflation, large deficits, low growth and a downturn in China.

And they may soon face problems in international financing.

The political systems in emerging powers are fraying, too. There have been huge protests in Brazil over wasteful government spending and inadequate social programs. Russia looks more authoritarian by the day. And the Chinese Communist Party is stepping up efforts to crack down on journalists, academics and bloggers in what seems to be an attempt to control the discontent that accompanies slower growth and painful economic reforms.

These “rising powers” are hardly faring better collectively. The international institutions they established — BRICS, the Shanghai Cooperation Organization and IBSA — continue to disappoint.

At the same time, the United States is experiencing a turnaround of fortunes. The unemployment rate has fallen to just over 7 percent from an October 2009 peak of 10 percent. By contrast, euro-zone unemployment remains stuck at around 12 percent.

The U.S. fiscal picture is also looking up. The nonpartisan Congressional Budget Office estimates that the annual budget deficit will drop below $650 billion in 2013, the smallest shortfall since 2008 and approximately half the size it was in 2011. Meanwhile, the dollar remains the world’s top reserve currency.

Text Only
Opinion
  • Pensions need to be addressed I will have to admit that I am slightly overwhelmed today with the receipt of articles and suggestions for a column. One of my Fitness Mafia colleagues constantly tells me the columns are too long and trying to address different subjects just dilutes

    July 22, 2014

  • VA still failing our vets Jymm’s preferred attire is a skin-tight Minnie Mouse T-shirt with bright pink windbreaker pants. Even when not sporting his choice outfit, he dons short shorts and shirts with holes in them, because that’s what he finds most comfortable. His Santa Mo

    July 22, 2014

  • Feed your home piggy bank with a 15-year mortgage This summer, we finally decided to take the plunge we’d been contemplating for a while: converting our 30-year mortgage to one with a 15-year payoff. It’s a big step. Our payments will go up somewhat (the PITI — principal, interest, tax, and insuranc

    July 19, 2014

  • Under the dumb There is a TV series about an entire town trapped under a giant, mysterious crystal-clear dome that appears out of the blue one day. The dome is impenetrable; no one can get in, no one can get out. Who made the dome? Aliens? God? A super-secret branc

    July 19, 2014

  • Widening the loopholes This week, two more U.S. companies moved to reestablish themselves overseas, allowing them to pursue lower corporate tax rates. They will join dozens of others who have chased lower tax bills abroad while maintaining operations in the United States,

    July 19, 2014

  • Patriotism not questioned Editor:I am responding to Mayor Mary Jane Chesley’s Reader’s View article in the Thursday, June 19, 2014, Register-News “Patriotism is strong.”The mayor has missed the point of my Reader’s View/opinion article in the local newspapers regarding Flag D

    July 19, 2014

  • Who's telling a story now? For this administration, failure is always the result of a “communications” problem. Otherwise, failure might be taken as evidence of misguided ideology and incompetent execution, right? It’s a weird excuse for the president who fancies himself to be

    July 18, 2014

  • Why cutting corporate taxes won't help the middle class WASHINGTON — Earlier this week, I testified in front of the Joint Economic Committee on the topic of assessing the recovery after five years.As you can imagine, congressional testimony can be pretty frustrating these days for members of the fact-base

    July 18, 2014

  • Heart of darkness in buffer zone BOSTON — “Be careful. This is a dangerous corner.”It’s not until you visit the Boston Planned Parenthood clinic at the heart of the recent Supreme Court buffer-zone case that you realize the unnecessary danger it created. And I’m not even inside.On t

    July 18, 2014

  • When should U.S. use force? Was the Iraq war the greatest strategic error in recent decades, as some pundits have suggested recently? The simple answer is no. That honor belongs to the failure to take action against al-Qaida and Osama bin Laden before the attacks that killed ne

    July 17, 2014

Twitter Updates
Facebook
Stocks