By Fareed Zakaria, CNN
This was U.N. week and there was some drama over the issue of the Palestinian bid for statehood. But the real action is taking place now - as the world's finance ministers and leaders meet to talk about money.
I think it's fair to say that we are confronting the worst economic moment since the days after the collapse of Lehman Brothers in 2008. Growth has slowed in Europe and the United States - and is slower even in the bubbling emerging markets. Some European countries now have problems with their debt burdens that appear unmanageable and that problem is spreading to major European countries like Italy.
Europe's banks have too little capital and too much bad debt on their books; they are poised for a Lehman-like event. And here's the worst part, in light of these problems, key governments are doing - almost nothing.
The real culprits here are the leaders of Europe. They have kicked the can down the road for two years. They now have got to face the fact that the euro was badly created - mixing together economies of very different characters - and fix it.
That could mean a smaller, stronger eurozone (which is to say, letting a country like Greece exit). Or figuring out a way to let Greece default and shore up Italy and Spain. I've argued that the best solution would be to have the IMF get money from countries like China and use it to structure a long-term reform program for Italy and Spain. There are other ideas - like euro bonds, which would allow countries like Greece to borrow at German-subsidized rates. But Europe's leaders need to do something to deal with these problems.
In the United States, we talk a great deal about the jobs issue but who's doing much about it? President Obama's jobs plan, which is pretty good, is going nowhere in Congress. (And he hasn't helped matters by presenting a gimmicky and inadequate plan to fund that program). The market keeps telling us by the ever-falling interest rate that it fears another recession, not inflation.
Everywhere leaders all seem to assume that if they just keep things steady, something will miraculously happen to solve the problems and jumpstart growth. It won't. The problems are actually getting worse and by sticking their heads in the sand, leaders are only deepening the inevitable crisis.
For more of my thoughts throughout the week, I invite you to follow me on Facebook and Twitter and to visit the Global Public Square every day. Also, for more of my takes, click here.
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Fareed, a sound interpretation of events. However, I find that you are too optimistic about the role of politicians to solve economic problems – while politicians can easily cause economic problems, as we have seen through their excessive spending and borrowing, and their interference in markets, perhaps the best thing the politicos could do would be to step out of the way, stop wasting our children's inheritence, and let the markets resolve matters.
Since nothing is getting done anyway you should be happy then.
they are not leaders, they are just politicians, they deal wit the fame and money only , and they evenn dont care for nothing.phlebotomy courses
Would you favor a return to government policies before Theodore Roosevelt, or would before Grover Cleveland be more to your taste?
David, before discussion what we should, in your words, what caused the Wall Street crash? And what caused the cause?
What do you think the government should have done differently?
20/20 hindsight should be easy. Can you do it? (Is there any depth behind your opinion?)
The cause of the current crisis goes back decades probably even before the boom of the 90s. There are two realities that got us here.
1) Markets fluctuate. Periods of unrealistic growth are followed by corrections in which the economy slows down.
2) Politiciians are extremely short sighted, and view everything in terms of the next election. This gives them a perspective of two years at the very most.
So, putting those two realities together, you get the following sequence of events:
Bubbles form in the market resulting in higher than normal growth.
The bubble starts to break
Politicians see the bubble breaking, not as a correction, but as a slowdown from "normal" growth and they reach into their bag of tricks to keep the unsustainable growth going. They cut interest rates or lower taxes or give tax credits in order to make sure that the consumers have more money to spend so that the economy won't contract.
Meanwhile, the gap between where the market is and where it should be keeps growing, setting us up for an even larger correction.
Eventually the bag of tricks runs dry. Interest rates get cut to practically nothing, Income taxes get cut to the point where most people don't pay anything. The only thing left is for the government to start giving out borrowed money.
When there is nothing left that government can do, the market finally corrects itself. Unfortunately, by that time, the correction needed is so large that it sets us up for a decade long recession.
Get out of the way of the $600 billion dollar a year war-for-profit machine? That's so ignorant, it hurts.
Nothing is done on political level because leaders worry more about their popularity among voters than their country's future.
Angela Merkel feels the resentments of her fellow citizens in Germany towards bailing others out. Papandreou goes again his people in order to get the badly needed money to keep Greece afloat. Berlusconi cares only about Italy's image abroad. Obama defends his budget as he needs votes for his re-election.
Unfortunately the markets are what got us in to this whole mess. A lack of regulation, whch was initiated by Clinton caused the housing crisis. Without some one watching the till, greed takes over in the private sector. Bush further exacerbated the whole mess by being asleep at the wheel.
As a young person with a family, I have a lot more to lose from all of this than you, since it sounds like you are retired and just waiting to give your kids your money. Perhaps you need to stop worrying solely about the petty inheritance (cash) you will hand down to your family and worry more about the inheritance (infrastructure) you are sending to everyone's kids. I for one would rather not receive any inheritance from my parents, but rather be able to get a job and develop my own life and career!
David,
While I agree that many politicians are not adequately trained to be in their positions, I disagree that the best solution is to "let the markets resolve matters." Please, cite one case where the markets fixed a broken system. Europe's economic system is suffering because the Euro was poorly created, as Fareed points out. The government has the responsibility to make sound decisions to correct this matter, not to ignore it and hope that the market eventually works things out. I'm sorry, the market cannot fix a system. It doesn't work like that.
That's ridiculous. The markets are not self healing and what it would mean is that retirement plans will become worthless if you allow it to unwind in such a wild fashion. Markets are looking for reassurance from policy makers that they will do what they're elected to do and have the power to do.
Your interveiw with Erdogan; no follow up on his claim of "hundreds of thousands of Palestinians killed? No follow up on his claim that thousands of rockets shot into Israel is really no big deal? Another puff interview. Of course an Israeli never gets the puff only confrontation...What a joke
You saved me the effort of typing my complaints about the Erdogan interview...and I use the term interview loosely. CNN can save some money and just have a robot ask questions and let the person being asked blab at will, with no follow up. The whole thing was embarrassing. Then they wonder why people have no respect for "journalists" anymore.
Great Interview Fareed you ask Q That billions of people want to know. good on you. Erdogan is person who speak the truth hope Obama and Israelie leaders do the same.
As someone who watch you every Sunday, I watched your interview with the Turkish PM this morning, what a joke! You never challenged him re the Armenian Holocaust when he compared the Jewish Holocaust to the Palestinians, or the Turkish/Curds aggression when he wants to be the human leader. You have allowed without a question mark the non answers to the question regarding Turkey becoming more Islamic and less secular or the dancing around Syria and Assad. You gave him a platform without even once challenging the FACTS. I expected more from you.
I think that some honesty must begin to creep in those people like you who comment on the world and national economy.
The democratic governments around the world are not in control of their respective countries, world wide corporations are.
You often hear that corporations are sitting on their money, not hiring, reinvesting in this country because of uncertainty Give me a break, corporations are investing in Russia is that country stable, in India, I've been keeping track of the political and ecomonic problems that exist there. Just go around the world and track corporate investment to determine the real relationship of government to corporations and you will come to only one concludion, corporations control the world, via S & P and all the others. Today business has become a deity for many. That is they believe that whatever is good for business is good for the world. I don't think so. If world governments are ever going to take the steps to improve the living conditions of their people both today and in the future ( I mean the starving child of today influences the world of the child that are born tomorrow)., they are going to have to get control of these corporations not starve their populations. Hungry people start "riots" they will fight back. That is what happened in England, despite the attempt by the media to make those demonstrations something else. Read the following and then have your researchers find out how many people Cisco has hired here in the United States.
. Cisco Systems Inc. says it will invest $1 billion in Russia over the next decade, plus $100 million in venture capital. Cisco also will establish a "dedicated physical presence" in a planned technology hub outside Moscow, touted as "Russia's Silicon Valley."
"Simply put, we're all in," said Cisco CEO John Chambers at the company's San Jose headquarters Wednesday, with the Russian president beaming by his side. "We will be great partners. We will try never to let you down."
Cisco does not share the doubts expressed in many quarters about Russia's high-tech potential and Medvedev's drive to modernize the former empire.
Paula to give an answer to a really well laid out problem there .... corporations like Cisco are not greedy, but they are not patriotic either....... what they like is profitability and also fear going under .... Countries like Russia and India are investing serious money into R&D more than ever before .... with cost of living being what it is in these countries they will be able to produce more results at lesser cost .... that would leave companies like Cisco as sitting ducks if they are not part of this new movement ..... America will have to reduce its cost of living .... period ....like everyone telling Obama to spend less, people should adopt the same measures too ..... the American dream of the best of everywhere for every American household is no longer tangible ... afterall you were the ones that created replicas of your economy around the world ..... no use complaining about it now ....
CheekyIndian is absolutely dead on. But I will extend it further. Companies fear uncertainty. The reality is the political uncertainty in Russia is more manageable then the economic uncertainty in the United States. Buisness be it big or small does not trust the Obama administration. The small buisness owner sheds blood, sweat, and tears in the hope they will strike it rich. Would the 49'ers of old risk their lives crossing North America if they knew most of their new found riches would be confiscated by the government? If your going to be buisness unfriendly, the inevitable results is that buisness small and big will be reticent in investing. Perhaps the reality of the increased taxes and increased regulation is modest. Yet the rhetoric leaves it open to interpretation what Obama's real intentions are.
@Steve – Man, do you know the hell a small company has to go through in a developing country? And yet they thrive and do whatever is needed to make a profit. Stop listening to the spin machine. Just see for yourself what's happening: America is getting poorer every day (for the last 30 years) and therefore business don't invest anymore here. Thanks, globalization!
The American dream is about providing education and equal access to generate opportunities for everyone, not the best of everything for everyone. Our problems begin and end with education, which is in shambles because many single parents simply cannot work 2 or 3 jobs and spend quality time helping their kids. Our economy is now based on investor first, employee last and that's where all of the money, news and energy is focused...that's why we'll continue to ride bubble after bubble until people get fed up and take over the factories themselves. The world economy is now this way so we're all in the same boat being capsized by traders, hackers and suits being idolized and paid out handsomely based on short term profits.
Sorry it should read "child that is born tomorrow"
Fareed – I have watched and read you for quite some time and enjoyed your insights. Today, I turned off your show midway through your interview with the Turkish PM. Your presence at this "interview" was unnecessary, as you said and added nothing; the PM's presence unnecessary because everyone already knows his views on Israel. We watch your show, not to see what important people you have wrangled for this week's show and to hear them pontificate, but to hear you challenge or at least question their views. If your purpose today was to imply, through your silence, that you agreed with his views, I am not only disappointed in you as a journalist, I am disgusted by your ignorance.
Great Interview First time this guy make me happy to see what honest guy he is. Erdogan mate your the man I am not a Turkish but we need people like you that talk from heart.God protect you from terrorist IDF.
More economic nonsense from CNN: the banks in Europe have to take haircuts, not the taxpayers. Or haven't they learned anything from the bail outs in the US over the past few years? Losers have to take the hair cuts, not taxpayers. The sooner, the better.
Banks should STOP lending to countries so countries can continue to deficit spend. That would STOP the problem.
Secondly, we should STOP buying US savings bonds and any other government bond. The Chinese should do the same. That would STOP our deficit spending.
Taxpayers should not bail out deficit spending. Neither should we.
some people do not like Fareed only because he is Muslim. eat your heart out loosers.
Why would someone who loosens things have a problem with Muslims?
It has nothing to do with Fareed religion. Fareed is such a softy and that is the fact jack !....Bill O'reilly kicks Fareed ass when it comes to interview and asking hardball questions.
Once again I have to say that Rebumlickers are determined that Obama be a 1 term president. So much so that they block any attempt by him to help the economy so they can point their fingers and say it's his fault and we'll fix it in 2012. We all know this disaster was passed down by (b.s.) Bush. Now when Obama wants the people that made money off us over this mess to give it back, they have a fit. It's really to bad that Obama has tried to reach out to these nitwits to work together as government was supposed to to fix things. To bad he can't ram the changes down their throats, like they get rammed up the a»» by big business, and we take it up the a~~ from all of them.
Dont take his name in vain. George Junior is not running the country now. So stop using/calling his name in any discussion. Blame Obama for all your problems because he is the main problem aka does not have the spine (and leadership) nor experience to run the country.
And why would we be surprised at no response from those whose spole mission is to undermine and destroy capitalism in this nation? The irst step in that overall goal is to destroy everyones wealth because citizens without means are so much more easy to control and keep in line!
To be honest Fareed, neither political party has the guts to take the ONE action that would return jobs to the US. Neither one.
I see absolutely no job growth to speak of, for years into the future.
You're absolutely right. This would eat right into their campaign money – no more aft contributions from all multi-nationals.
Hey CNN, where is your coverage of the NYPD assaulting the protesters in NYC. Do we live in Iran now?
They tend to report actual facts, not hallucinations.
It is the fact and for you quit smoking that crap. will yea....
They buried it, but the story is there. Click on the US tab on top + its the 3rd from the bottom story listed. They like to hide the truth, but its there if you dig for it.
You can watch it live here: http://www.livestream.com/globalrevolution
Herp Derp...who cares.
wonder how people feel that this h1b guy is telling us what to do about our economy. shouldn't they be fixing their economy if they are so smart.
Be reminded that Ivy Leaguers, from every corner of the globe, have the world in the MESS that it is now in economically. I think it is time to give those who graduated from the universities of HARD KNOCKS A CHANCE AT LEADERSHIP. They sure as hay won't do any worst than our brightest minds have done.
Yeah...I agree with you. Therefore, vote for Perry since he is from the University of hardknocks....
This H1B guy has more viewership and makes more sense than the US Citizen Limbaugh....looks like we need to increase the number of work visas if it means bringing in intelligent people like him here...American education is not helping matters
oh...and their economy is moving much faster than ours.....as if you didnt know...sad but true!!!
"Or figuring out a way to let Greece default " Uh – Greece ALREADY defaulted. Months ago, they got together with the rest of the EU and said they couldn't pay their debts. At the time, they agreed to pay 80 cents on the dollar instead. If that's not a default – failure to make agreed-upon payments in full and on time – I don't know what is.
The latest problem is that now they're claiming they can't even pay the 80 cents.
Why is a stand against Israel by the Turks considered a stand for Islam. Turkey is a sovereign nation, it has a right to stand up to agression by any country, Israel included.
Just as Israel has a sovereign right to block anybody entering its borders without a valid visa, or is perceived to support anyone who is a threat to its existence. Otherwise all vulnerable countries would be open to attack ; just like the terrorists who attacked Mumbai, and sailed in from Pakistan.
We enjoyed eight years of, unpaid for ABUNDANCE, under the BUSH Administration. And we are now experiencing eight years of FAMINE because of that PAY LATER PLAN. Its all about YIN and YANG. We are now reaping what we sowed. WE PAID FOR NOTHING UNDER THE BUSH ADMINISTRATION. ALL WE DID WAS POCKET THE MONEY AND DID NOT CARE WHO GOT SCREWED, WHICH CAUSED ALL OF US TO BE SCREWED.
I guess the fact that obama has actually increased spending by 22% doesn't bother you huh? It's just Bush's spending that's the problem. What a hypocrite.
I don't understand how people like you can defend Bush. You wage two different wars and you lower tax rates ... where the hell are you going to pay for this double whammy ... The debt has just caught up now ... it's as straightforward as that.
Really? The spending during the Bush years pales in comparison compared to obama. DEMOCRATS spend like drunken sailors. The last Republican budget had a $160 Billion deficit... DEMOCRATS multiplied that deficit by 1000% in just 2 YEARS!
Brian, both parties spend like drunken sailors.
Dick Cheney flat out stated that "Deficits don't matter, Reagan proved that." George Bush increased spending on Medicare AND military, and paired the increased spending with tax cuts.
Whether or not Obama has been worse depends on whether you decide that he gets credit for the 2.1 trillion dollar deficit package that he signed. Either way, our deficit has grown faster than the economy for 28 of the past 30 years, and that's not sustainable no matter who you want to blame.
Most Democratic supporters blame Republicans, but Obama had 2 years of Democratic control of both the Legislative and Executive branches. Instead of working on the economy, they passed regulations in the form of Dodd-Frank and the "Affordable" Care Act. They then say that they didn't realize how much of a problem the economy really was. Failure to see is not a fault of the Republicans. If the recession is to be blamed on Bush, then Obama takes full ownership of the jobless recovery.
Blaming George Junior again?....so sad and too bad! why Obama wanted to be President if he could not solve economic problems? or better yet why you all have elected Obama? you all know that he does not have the experience, leadership and more importantly does not have spine to stand up for what he believes.
Debt's only a crisis where you live with what you want rather than what you have. The US has taught most of the world to borrow against their own future, and never figured out how to recover. If the world sinks, the US is the leader of the free debt spiral.
We are _so_ fu[n]ked! Assume the position and prepare for a rough ride as the Guiding Hand of world markets comes crashing down on the bankers who have made years of stupendously dumb and risky decisions.
Unfortunately, those banks are going to take with them the pension funds and savings of everyone who trusted them to make the right decisions.
It would be nice to simply watch the banks burn, but the banks are an organism that has burrowed itself deeply into every corner of society.
Now Fareed Z is an economic expert? Wow... Next he will be wading into the field of Medicine to upstage CNN's Gupta..
He does have a PhD...
I know. Now, iIf he just had a brain to go with it.
Nah...he is not good at economics nor medicine. But he is good at cooking (or may be I am wrong) ! if CNN will dump him, he will go to Food Network?...
Now Fareed Z is an economic expert? Wow... Next he will be wading into the field of Medicine to upstage CNN's Gupta....Obama's jobs plan is anything but.. just another subsidy to his favorite union supporters..
Obama's plan would certainly help create jobs, but the question is how many and at what cost? No amount of economic manipulation is going to overcome the inexorable tide of capital fleeing to nations with a lower cost of labor.
Now is the time to pay down our debt and weather the storm until things equalize.
Fareed seems to be the only reasonable voice around when it comes to national and international economic situations. Fareed for president!!
The only thing Obama is doing about the debt crisis is politicizing it, a reflexive reaction with this Administration. Should be interesting to see how they politicize Rosh Hashanah this week. Maybe we should take some lessons from the White House Easter Egg Roll ...
http://www.ombudizen.com/2011/09/25/permanent-campaign/
Obama's politicizing the debt situation? Did I read that correctly?
Why, yes, you did. Hard to believe that a man who politicized two wars while our troupes were in the field would do such a thing.
Well... let's see here Fareed... The Republicans are currently doing everything they can, and throwing themselves against public opinion and the total demonization from YOUR PARTY in order to lower the debt, but every time they do... YOU and YOUR PARTY block them in the Senate, say they are trying to kill old people, say they don't care about the middle class. Fareed, YOU ARE A JOKE, so is your party
No, neither party is doing "everything that it can" unless you mean "everything that it can without doing the things that would be hard."
Neither party is doing anything to actually lower the cost of medicine in the US. They're all in the pockets of big pharma and the insurance corporations.
Neither party is willing to combine aggressive tax increases with aggressive cost cutting. Every one who isn't drinking red or blue koolaid understands that there must be fundamental fairness, and that means pain that's spread across society.
You blame Fareed and the Democrats, and they blame Beck and the Republicans, and you're both right because neither party is being honest and their own partisan supporters don't WANT them to be honest. You want "your" party to win the lying contest, and some one else wants "their" party to win the lying contest.
Don't tell me your that ignorant, Brian. If you think the GOP is lily white pure on these issues, you are sadly mistaken. Both parties share culpability creating these false public impasses, resuling largely in ineffective and dysrunctional government. The Great Recession, aka 21st century depression, started under Bush and continued under Obama. The USA has been effectively lost politically since the disputed 2000 election. PLease note that analysts today have ruled the 2000s a lost decade economically as well.Bush was in power 8 of these years, so there is plenty of blame to go around on both sides.
Oops! You seem to have forgotten "Recovery Summer". Obama and Biden fixed Bush's recession. This recession is all Obama's. Unless, of course, you want to go with Obama's position that Bush WOULD HAVE caused this recession too, if he had been given the chance so, it really is Bush's recession after all.
We need to vote for Herman Cain. We need 9-9-9!!!
No, thanks...that would be as bad as wasting your vote on Ron Paul.
This whole thing has now gone too far and is NOT fixable right now. Compound Interest is going to deliver the Coup De Gras. There is too much squabbling to find any unanimous solution which MUST be radical. A Dictator like Hitler could solve it ... and he did in Germany. He said all debts are hereby cancelled. He issued new money and picked Germany up almost overnight. Engineers can design an almost perfect monetary system RIGHT NOW but there won't be a mandate from America to let them go to work on it. So what happens next ?? A complete collapse eventually. So clean up your personal act and get ready. Start by buying physical gold and taking delivery of it.
We ignore this situation because it undercuts our assumption that everythng bad that happens in the world is due to some American politician. There is a world catastrophe going on because banks around the world seem to be going bankrupt for no reason that no one can –or will explain. I'm no financial genuis but I suspect that some of these money enhancement schemes they have developed in the last couple of decades–derivatives, default swaps etc–have gotten out of hand and they find themselves unable to payout the promised profits. So they avoid lending to businesses, which in turn leads to cash crunches, layoffs, selloffs etc etc
Only way to remedy the global debt problem is to initiate a global solution. A global problem needs a global solution. The segmented austerity programs and purposed revenue increases are the wrong options for now. Now we need a global solution, a rebooting of the world economy.
There is only one: Global Debt Realignment.
http://www.debtrealignment.com
"That's the way it is."
Good take on the crisis.Problem is that the developed world has been living on borrowed money for too long..and emerging markets have been giving credits to them for too long..eg China..and creating capacities to fuel the supply for the demand created by the credit ...the emerging markets need to create demand within..and the developped world needs to tighten their belts for sometime and think about ways of paying off the debts..
Why do we care what a foreigner says about America.
How do you know he's a foreigner? He might just be an "unauthorized immigrant" (new term recently introduced on CNN). You just never know.
BB, whether you chose to acknowledge it as a fact or not, if you are not American Indian, some foreigner came to America which resulted in your birthright. I often wonder what American Indians are thinking when they hear YOU ALL speaking about FOREIGNERS?
This guy is becomming more of a pimple on the azz of America faster than anyone else. Send him back under his rock already.
Mr. Zakaria please look up Monetary Sovereignty. We are heading for another depression because these debt hawks do not understand what a deficit is. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.. There are so many lies being spread around right now, the American people need to know the truth. There is no debt problem here in the U.S. only a jobs problem, and cutting our debt/deficit will only guarantee the worst depression we have ever seen. Those, who do not understand the differences between Monetary Sovereignty and monetary non-sovereignty, do not understand economics.
Sounds like you're an expert in Obamanomics. The Light Brigade had nothing on you guys.
Actually I am an expert in reality, why don't you look it up for yourself. Maybe if you took the time to learn a little bit about economics you might have a more informed opinion. I do not support Obama or the tea-party as both are trying to destroy
America with their austerity garbage.
How about defeating his argument instead of spewing out an insult?
People who insult instead of providing an argument suggest that they are actually incapable of providing an argument. Are you capable of providing an argument?
How do you know they are lies? A lie and a falsehood are not the same thing. A lie is an attempt to deceive in an environment where honesty is expected. (A fake in sports isn't a lie because that sort of dishonesty is expected.)
You are right Luigi, I am only assuming they are lying, they are either lying or just blissfully ignorant.
The government IS preparing to deal with the debt crisis. At all levels, in all branches, in all divisions of ideology, they are sharpening their pointing fingers.
The Government is preparing to destroy the economy. Can anyone here tell me how cutting the deficit will create jobs? Does anyone here actually understand what a deficit is? Does anyone here understand the government has the ability to pay any debt any size at any time? Whoa I bet that blew your minds. You know what happens when you go into deficit reduction mode? Recession. You know what happens when you go into deficit reduction mode during a recession? Depression. The United States has the unlimited ability to create it's own currency. The deficit is simply money that has been created that has not been taxed back. The only limitation to creating money/spending is inflation. Has anyone seen inflation lately? Oh yeah that's right, his arch enemy deflation defeated him a long time ago.
The Government has the ability whether they seem to realize it or not, to put an end to this mess. Yes it might seem crazy but we can spend our way out of this. Then when things recover if we need to we can always remove excess currency through taxes. Which of course will bring us to another recession. Boo.
@Mark Perhaps you can explain why your comments seem so idiotic? There are plenty of examples in history of nations spending so far beyond their means that it caused their citizens extreme pain. If $120T in U.S. unfunded liabilities isn't a concern to you, then pray tell how much would be? Or is money infinite in your universe?
GOP, I fear you don't even understand what you did. If Mark's comments are idiotic then he couldn't possibly explain them (because he'd be an idiot). So, what does it mean if you ask an idiot to explain his idiocy?
Since you aren't an idiot, then Mark can't be either. If Mark isn't an idiot, then his comments can't be idiotic.
(If you are confused, try looking up idiot in the dictionary. If still confused, compare intelligence to knowledge.)
@Luigi: Right. Cute. Ignore the point much? Our nation is aflame. Think not? Time to get a clue.
I am trying to explain but everytime I wrote A long post it never shows up. Lets see if this one shows up.
@gop1787–
It seems idiotic because it goes against everything you have been taught to believe. This is the reality. Federal Deficits – Net Imports = Net Private Savings. The fed government does not need outside sources of income, it can spend reserves into existence. I would suggest doing some actual research, but please understand 99% of the people out there are confused about this and will only provide bad info. The other nations you speak of spending beyond its means are monetarily non-sovereign nations who are unable to create its own currencies.
The comment section here is horrible, I do not know how many posts I have written that haven't shown up here. If you really want to know about how monetary sovereignty works do some research, cnn wont let me explain on here for some crazy reason. I am tried of rewriting posts.
Obama is doing something about it: he's proposing more spending. He's not afraid of any ole debt crisis.
Here is a break the bank idea that could help the US economy in a massive way. If all companies that do business with China were forced to make those companies be on par, I mean neck and neck, with all US standards, for health safety and the environment. The costs over there would be so high, everyone would just return to the US. Think how it would change the world if everyone had to be on par with the US. That's how your country would get back on top again. If all the developed nations did this to Chinese companies and their workers had pensions and healthcare and benefits, do you think they would still be making shoes in sweatshops for a dollar a day?
Instead of the government giving billions to Haliburton to hire minimum wage flag people for the road work Obama is proposing, why not try what they did here in Canada in 2008 when everything crashed. The put out a home renovation tax credit. You could claim up to 10,000 on renos, it was huge for us. It created and maintained fantastic employment at little cost to the government. There are plenty of people with money still in town, they just need a little incentive to spend some.
that's not true. some members of congress tried to pass a cut, cap and balance legislation that would have made it impossible to deficit spend but they were vilified by you and the rest of the main stream media. it makes me sick to watch the pundits on your cable show go after the character of honest conservatives while bowing at the alter of the tax and spend liberals. you sir are a hypocrit.
When you think about it the tendency will be for all countries to be equal. A middle point between first and third world countries. The only way is for private citizens to buy bonds from their own country. Each country can work the tax and inflation system to mitigate that debt over time.
@Steve You apparently have no idea how bad our nation's fiscal situation really is. Because if you did, you might understand how idiotic your suggestion that more Americans buying our bonds would resolve our spending issues. Your solution is not even in the same universe as the problem...
You have to wonder sometimes if the West's time has passed, including the US. Our poltical systems are disfunctional, we fail to have the political will to work out solutions during this difficult time. In the US, we have a poltical party dedicated to destroying government, instead of making it work more efficient and effectively. Conservatism has morphed into anarchism, neither healthy nor productive. The liberal side, to be fair, is weak and bankrupt of ideas. In this vacuum our economy and wealth, social structure will decay and decline. Success in any nation is the product of the politcal will of a people. Eventually, our military and security will follow since a military is only as strong as the economic health of the country it comes from. In our lifetime we could see the domination of the new powers like China and India and other countries. Of course, who can predict the future. Americans may reinvent themselves again, as we have done before.
In simple words – Curse of Lehman Brothers !!
you are wrong Fareed ... the democrats are doing plenty of proposing increased spending (or slowing the growth of increase) ... and the conservatives are trying to cut spending. The problem is ... the democrats refuse to cut spending and are thus blocking any progress in bringing the level of debt down.
Of course the Democrats act that way. Are you so obtuse that you don't know the core economic principle of the Democratic Party? Back to college for you and take some economics classes.
I really like your show and was very surprised that you basically gave a platform to Ergodan to espouse such a one sided view of Israel's action during the Gaza flotilla raid. A UN report on the incident stated that "serious questions about the conduct, true nature and objectives of the organizers, particularly the Foundation for Human Rights and Freedoms and Humanitarian Relief (IHH). Despite the noble name, the IHH has been considered by some as a "radial Islamist group masquerading as a humanitarian agency (Spencer, Daily Telegraph)." Could you not probe why Israel took the action it did? Please Fareed, don't give a platform, give the public a balanced discussion. We counting on you.
Yo, Fareed! So much pompousity. So little substance. By "sticking their heads in the sand" are you including yourself? For you continue to fail to even mention the truth about how bad our own nation's finances are:
The GAO says
- our unfunded liabilities are > $120T,
- we have a 90% debt to GDP ratio,
going up ~10%/yr with >$1.2T deficits,
- 60% of public debt matures in < 3yrs,
- astronomical money supply growth, and
- ALL federal revenue from income AND Social Security taxes is just $2.5T/yr.
While important, why does the information you supply belong in the article? If he did that, he'd be guilty of the same "sin" that got me an A- in one college course a while back instead of an A. "Correct and interesting but not relevant to the thesis."
"Someday the bottom will fall out." – Bob Marley.................
That someday might be closer than we think.
All the government has to do is seize the wealth of the top 1% of Americas wealthiest. That would completely pay off the debt and leave them with trillions to spare. They are all good in business, they will be fine...
Uh huh.
First, how do you do that? Money can't simply be seized.
Second, why do you think they'll be fine? I don't know how to run a business without working capital. Do you? Have you ever run a business?
The US spent $600 billion dollars of taxpayer money last year alone on war and other defense junk. It's just out of control. I dated a guy who said he was in final bidding on a $500,000 job to write a report on something war related for the defense department! Half a milion dollars? He laughed at the absurdity and was willing to line up to get it.
Defense spending has got to stop.
Stop defense spending? There's a lot that should be obvious (but apparently isn't) with that. But instead of that, I'll give something that isn't obvious.
Your assertion of "defense spending has got to stop" means abandoning warships, including those with nuclear propulsion and nuclear weapons. Perhaps Cuba would like them....
Now they just have to pull up near NYC and announce, give us $100 trillion or we will destroy your nation.
"Great" plan.
Republicans want to reduce or eliminate Corporate taxes. Here is an idea. Eliminate corporate taxes. Impose a 1% administrative fee on corporate gross income. Require the distribution of all rpofits to the share-holders. We can make that retroactive 10 years on all profits held in foreign banks. Non-declared, non-distributed profits get confiscated. That should inspire some honesty in accounting. Distribution to foreigners are taxed at a flat rate ot 32%.
Mr Obama's job plan proposes either existing state/municipal jobs make upgrades to roads and bridges or for those cities that privitized them already break their contracts to make already made repairs. My Evergreen Economic package hires workers to upgrade US family records by 230 years and to create a database. Also, Bernanke's exchange of US cash for Euro dollars should halt until mid October to see if the market can bear it. I have US austerity measures standing by so vote for a KLS Act for President 2012.
Don't let these losers take us down. We have got to take the pain now and price this in, and also establish a dialog in the harshest possible tone for two reasons: 1) to distance ourselves form a bungling Europe. 2) to try and knock some sense (unlikely) into a doomed, and rash, and inevitably failed Euro.
Markets, shmarkets, the Gov't supporting gambling for the rich. If investment capital were used appropriately,
then you'd have to hold onto your share of a company for more than two minutes.Garbage in, Garbage out..
CLEAN , AFFORDABLE ENERGY–or "You're out!!"
In order to save the world from a new financial crisis, the Euro zone should indeed remove Greece from Euro zone. It will not break up the currency. When you have a tumor you try to cure it with medications (for the financial tumor those are the austerity measures), and if that tumor is continuing to grow (the financial tumor of Greece i.e. its debt is continuing to grow) then you HAVE TO go for surgery. If the rest of the body is strong – the surgery is usually successful. The rest of Euro zone although with troubles is much healthier than the increasing Greek tumor and will survive the surgery called: "Removing Greece from Euro zone".
Why should hard working Germans or Chinese work and give their savings to support the Greeks (who are not so hard workers) ??
It's buisness as usual.Congress is content to skate by because of the comfort level they have enjoyed for years.And the president is campaigning for reelection.These people do not care about us.
Several of the individuals that provided logistical support for the 9/11 Al Quida attack on the World Trade Center are currently residing in Milpitas California.
They may include several former and current employees from the C.I.A., D.O.J., D.O.D, pre- Home Land Security agencies and non-governmental agencies.
Most Americans realize that not one person involved with helping the 9/11 attacks occur have ever been brought to justice.
Yet how is it that majority of the terrorists could not speak English, 12 of the 9/11 terrorists could live for 2 weeks just 2 miles from NSA head quarters in Maryland, take flight simulator lessons on Jumbo jet trainers, they needed lodging, several of them where on State department terror watch lists, etc...
It just makes sense that a logistic support network existed before and after the attacks. After the attacks they helped mislead the 9/11 investigation by capturing patsy's designed to take the fall.
This guy Zakaria writes opinions as if HE IS CONNECTED DIRECTLY TO FINANCE MINISTERS AROUND THE GLOBE. HE IS NOT .. PHONEY JOIRNALIST. DON'T BELIEVE HIM.
6 MONTHS AGO THIS LEAD CLOWN SAID WE WEREN'T IN A DEBT CRISIS
stupid asshat
It just amazes me to hear people talk about the supposed integrity of journalism, and why they won't go hard after 'big corporations'. News flash: CNN, Fox, NBC, CBS ARE 'big corporations'. You fools are asking them to go after themselves, which they will never do. They operate under the same rules as any other corporation: the bottom line. Why would they search for some 'real news' on corporate control when they are part of the problem? These companies (or their parent organizations) are globe straddling behemoths themselves, probably employing the same cheap foreign labor where they can, outsourcing jobs to cheap labor havens just like any other corporation concerned about profits is doing. Come on people, you can't be this naïve in this day and age. Why do you this that the protests in NYC are being ignored by the media? Collusion, plain and simple. That's why these guys get caught making statements like: 'smartest guys in the room'; they really think that they operate somewhere above the rest of us. Its high time we showed them that this is not true.
Fareed, your logic and judgment is headed in the right direction, but there is a much bigger story you are overlooking. The Europeans are contemplating extreme solutions for what are very small national debts (compared to the US national debt). What this means is that socialism offers much more narrow boundaries for staying solvent than capitalism. Americans should study this closely when coming up with solutions using a European model.
Margaret Thatcher's words are as true today as when she first spoke them "The problem with socialism is that eventually you run out of other people's money." What we are now beginning to understand is how low the smoking point really is for failure in socialist societies.
WAKE UP 99%. Zakaria is right. Our leaders are doing nothing about the sad state of our economies. you tube "occupy wall st" and ask yourself whether they are purposefully creating the crisis. CNN why do you ignore the fact that protestors down in the NYC financial district are being beaten and dragged in the streets?
Fareed, I blame all politicians but republicans are hard to deal with. They hardly compromise or accommodate and remember what Mitch McConnell said?: They [R's] will do anything to hurt Obama admin and ensure he loses in 2012. That is just a cold shameful fact at taxpayer's expense.
What, Zak has woken up, but still can't see through his socialist glasses. Very simple, how can you address the crisis level debt when you have a spendaholic socialist in the white house. Obama's running for re-election and will be handing out money for any vote he can get.
As someone on the Obama payroll, Freed needs to place a disclaimer before every article he writes. CNN should also as him to consider employment elsewhere. Yellow journalism at it worst.
Don't you have to suckle Rush's teet or something?
It is awesome to be a president.
How did you get your job here at CNN Fareed? You are consistantly one of the most biased, un-American, western-hate monger on staff. Is this why you were hired?
Aww shut up with your patriotic chirping! Fareed is from Mumbai India, not Muncie Indiana. He holds a worldview not one encased by a soundproof bubble. His astute opinions should be listened to not edited by the patriot police.
@gop1787
It seems idiotic because it goes against everything you have been taught to believe. This is the reality. Federal Deficits – Net Imports = Net Private Savings. The fed government does not need outside sources of income, it can spend reserves into existence. I would suggest doing some actual research, but please understand 99% of the people out there are confused about this and will only provide bad info. The other nations you speak of spending beyond its means are monetarily non-sovereign nations who are unable to create its own currencies.
The Europeans will use the current crisis to sort out the Euro so that in the long term they will be economically strong. In the mean time, while they sort it all out, they will act like an anchor dragging the US economy down with them. The US created the bubble that caused the GFC so now the US will have to put up with the pain involved in sorting everything out. The Europeans are not interested in a bandade solution. The world needs financial regulations that make the financial markets and currencies more stable and this is the goal of the EU and China. The USA wants to create another bubble to fund it wars, but no one is interested in doing this.
Fareed, with all due respect this is a crisis that cannot be solved by politicians or by borrowing money from China.
First of all this crisis is not only an economic crisis. It is more than that. The whole system from education, health care, to inovation and research is in crisis. There are no new ideas. Its like the humand kind hit a wall.
Coming back to borrowing money from China. China cannot and will not imitate US in helping Europe. There are diferences in values, culture, everything. And then it's not even fair to say to them give us money so we can pay for your products. What I think needs to be done is a more profund reform. A reform that will change our way of thinking, that will change our values and our priorities. If we will consider our civilisation, and the economy as part of it, a computer we really need to format this metaforical computer and come up with a new, updated, improved operating system.