Will The Deficit Hold America Hostage?
When America is held hostage because of financial issues vs. security concerns, it’s tantamount to what Enron did, a betrayal of trust. Have we sold our birthright for a mess of pottage? A deficit of any type significant enough to threatened security is mismanagement of the worse kind.
The U.S. needs investors to pour some $900 billion into the U.S. this year to fund the gaping current-account deficit. Increasingly, they don’t want to invest in bonds and loans but in real assets, Roubini points out.
“We’re not in a position of luxury where we can say ‘yes’ to this kind of investment but ‘no’ to that one,” he says.