In The News

Let Down by Politics

Nayan Chanda August 15, 2011
In reducing the AAA credit rating for the US, Standard & Poor’s offered a forward-looking opinion on the risk of the nation meeting its obligations in full and on time. Rather than shun US treasury notes, investors sold off equities, putting the US stock markets into a nosedive. The reaction reflects deep skepticism, not about the quality of the debt, explains YaleGlobal Editor Nayan Chanda,...

Global Economy: Is Anybody in Control?

David Dapice August 9, 2011
Around the globe, national leaders show no clue, no confidence, about how to re-engineer job creation or global economic security, contends economist David Dapice. The US has many resources for resolving its large debt, but bickering and stubborn quests for power prevent speedy resolution. Europe’s resistance to enact long-term policies on unequal accrual of debt among its member states and...

Beyond Debt Woes, A Wider Crisis of Globalization?

Peter Apps August 8, 2011
In recent decades, the world economy thrived on globally-driven growth and tightening interconnections among nations. In the process, nation states have lost control of the internet, financial markets, exploitation of natural resources and other global forces. “In the short term, that leaves policymakers looking impotent in the face of fast-moving markets and other uncontrolled and perhaps...

A Global Laughingstock, US Politicking Threatens Economy

Philip Bowring August 2, 2011
US Congress went to the wire, lifting a debt ceiling to allow payment of its bills, salaries and benefits. The world wasn’t impressed by a last-minute show of unity, after weeks of unseemly squabbling that put the global economy at risk. Financial journalist Philip Bowring contends the spectacle that raised the long-term costs of government borrowing also exposed an undercurrent of troubles: US...

Employment Versus Debt

Nayan Chanda July 26, 2011
Confronting an ongoing economic crisis, US politicians have assigned greater priority to the nation’s large deficit rather than an unemployment rate officially listed at 9.2 percent. Also overlooked is a report from the US Department of Labor that 3 million job openings go unfilled. It’s a head-scratching moment, suggests Nayan Chanda, YaleGlobal editor in his regular column for Businessworld,...

With US on the Brink of Default, Eyes are on Rating Agencies

David Dapice July 26, 2011
Governments have long operated by borrowing, not just for long-term projects but also daily operations. The US, with a self-imposed debt ceiling, borrows more than 40 cents for every dollar it spends. With the government about to exceed spending limits, global investors are on edge, waiting to see if the US Congress lifts the current debt ceiling, allowing continued operations, or goes into...

China Urges US to Protect Creditors by Raising Debt

Bettina Wassener, Matthew Saltmarsh July 15, 2011
China, a major lender to the US, urges the president and US Congress to reach agreement on lifting the nation’s debt limit, so that bills can be paid. “China holds more than $1 trillion in United States Treasury securities, making it highly sensitive to any developments that could lower the value of those holdings,” reports the New York Times. Statutory limits have been in place since 1917, an...