Shift in Washington Stirs Economic Jitters Abroad

President Barack Obama had two years to turn around a struggling economy before the mid-term elections. Voters expressed dissatisfaction, shifting control of the US House of Representatives, one of two legislative bodies, over to the Republicans. Republican leaders signal that reducing unemployment and taxes are priorities. But global onlookers fear tax reduction will aggravate deficits, widening imbalances and further weakening the US and global economy. “Without a healthier U.S. economy, the shift in the economic balance of power toward emerging market nations is expected to continue,” reports Liz Alderman for the New York Times. “If Washington ends up adding to the deficit rather than reducing it, one result could be a further weakening of the U.S. dollar against the euro, the pound and other floating currencies.” Many analysts harbor doubt that the legislative and executive branches can cooperate on pressing policies. If cooperation doesn't materialize, gridlock and uncertainty will undermine the US and global economies. – YaleGlobal