We have already established that the U.S. $16 trillion debt is number one on the economic fix-it list. But economies have become increasingly connected; we live in an economy that is global. Therefore what happens elsewhere can and does affect the United States. We cannot focus only on our own nation’s financial picture. In a global economy, financial markets and product markets are highly integrated. This means the European debt crisis or China’s trade slowdown can stress U.S. markets. And with 24-hour news coverage, world policies—such as strict austerity measures in Greece—and events, like the recent two-level downgrade of Italy’s debt, can have an immediate impact on the U.S. economy.
KeywordsInternational Monetary Fund Debt Crisis Sovereign Debt Austerity Measure Global Recession
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