Foreign Policy has the latest article by Noriel Roubini.
Dr. Roubini says that the U.S. economy looks increasingly vulnerable to falling back into recession and that flirting with stall speed, an anemic rate of growth that can lead to collapses in:
- consumer confidence,
- credit, and
- other crucial engines of growth.
"Whatever the term, we're talking about a negative feedback loop that would be devilishly hard to break".
He says this can be funded by allowing Bush's tax cuts for people making more than $250,000 to expire while keeping in place those for middle- and low-income earners, whihc are the vast majority of Americans.
"After two years, when U.S. growth is hopefully more robust and the pace of private-sector hiring has picked up steam, Obama can afford to phase out the payroll tax cuts. But the income-tax increases for the rich? They'll need to stick around".