If you asked that question to the experts, they would say two things: another blip in the Euro-zone crisis, and the fear that the US budget policies will crash.
I've spoken to a few people about this, and most of them said that there is too much optimism regarding the Euro-zone and that governments have become complacent. And, if we direct our glance to the recent rise in long term Spanish borrowing costs, it seems global investors are starting to agree. I can safely say that there has been some complacency on the US side as well, with the central bank promising to spend an apparently unlimited amount of money to get unemployment down.
Some investors though, seemed elated by the Federal Reserve's announcement. They believe that the extra cash being pumped into the economy will insulate recovery against costs of more budget stagnation in Washington. But I think this is just a case of over optimism again.
Lets see what the budget stalemate holds: from recent events, US fiscal policy is to tighten by over $600bn by 2013 (4% of GDP) from the expiration of the old Bush tax cuts and new spending cuts. The Congressional budget believes this move will send the country back into recession in the first half of next year. A lot of well known economists seem to agree. Hopefully, the Democrats and Republicans will come to some kind of agreement to ease the blow. But let's wait till the tax cut expiration and spending cuts kick in.
The problem is, the President and the Congressional leaders are at such odd, that the US economy might have to go over the cliff before politicians actually do something about it. Not the best possible scenario. Don't forget, that the general elections are coming up soon, and I wonder whether that will change the dynamics between the two parties.
The thing about US Presidential elections is that they are like roller coaster rides. The electoral contest between President Obama and Romney is not as close as it used to be. Latest New York Times-CBS polls show Obama leads Romney in Ohio 53% to 43%. History has shown that no Republican has won the elections without Ohio. The President also seems to be ahead by 9% in Florida. Even if Obama wins and the Republicans still control the House of Representatives and Congress, pollsters say that their chances of taking Senate looks slim.
So come 20th January, the balance of power could remain the same.
The important question is will this budget dilemma remain? Some say no, because a Obama victory would mean support for his ways - even the Republicans would have to agree. Some say yes, because the Republicans may have a chip on their shoulder over Obama's accusations that Romney's cut in health spending would hurt senior citizens. The Democrats too would be quite brutish after their victory.
It all comes down to the elections. But if the Democrats lose, the future of this budget will depend on who the Congressional Republicans blame for failing to win: Obama or Romney.
I've spoken to a few people about this, and most of them said that there is too much optimism regarding the Euro-zone and that governments have become complacent. And, if we direct our glance to the recent rise in long term Spanish borrowing costs, it seems global investors are starting to agree. I can safely say that there has been some complacency on the US side as well, with the central bank promising to spend an apparently unlimited amount of money to get unemployment down.
Some investors though, seemed elated by the Federal Reserve's announcement. They believe that the extra cash being pumped into the economy will insulate recovery against costs of more budget stagnation in Washington. But I think this is just a case of over optimism again.
Lets see what the budget stalemate holds: from recent events, US fiscal policy is to tighten by over $600bn by 2013 (4% of GDP) from the expiration of the old Bush tax cuts and new spending cuts. The Congressional budget believes this move will send the country back into recession in the first half of next year. A lot of well known economists seem to agree. Hopefully, the Democrats and Republicans will come to some kind of agreement to ease the blow. But let's wait till the tax cut expiration and spending cuts kick in.
The problem is, the President and the Congressional leaders are at such odd, that the US economy might have to go over the cliff before politicians actually do something about it. Not the best possible scenario. Don't forget, that the general elections are coming up soon, and I wonder whether that will change the dynamics between the two parties.
The thing about US Presidential elections is that they are like roller coaster rides. The electoral contest between President Obama and Romney is not as close as it used to be. Latest New York Times-CBS polls show Obama leads Romney in Ohio 53% to 43%. History has shown that no Republican has won the elections without Ohio. The President also seems to be ahead by 9% in Florida. Even if Obama wins and the Republicans still control the House of Representatives and Congress, pollsters say that their chances of taking Senate looks slim.
So come 20th January, the balance of power could remain the same.
The important question is will this budget dilemma remain? Some say no, because a Obama victory would mean support for his ways - even the Republicans would have to agree. Some say yes, because the Republicans may have a chip on their shoulder over Obama's accusations that Romney's cut in health spending would hurt senior citizens. The Democrats too would be quite brutish after their victory.
It all comes down to the elections. But if the Democrats lose, the future of this budget will depend on who the Congressional Republicans blame for failing to win: Obama or Romney.
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