sábado, 30 de julio de 2011

Buckle your seat belts...

The news coming out of the US is not good for the US and not good for Mexico. The US economy is weaker than we'd thought: the revised GDP numbers show the recession was worse and that this year is weak. Revisions cut the first quarter 2011 growth rate from 1.9% to 0.4%. In the second quarter, the economy grew just 1.3%, less than half the average annual growth rate of the 60 years prior to the "Great Recession". Unlike Mexico, the US economy is still smaller than before the recession began in 2007.

Then, there's the debt ceiling. It's looking like the unthinkable could happen: lawmakers may well not agree to raise the debt ceiling before the August 3 deadline. Higher interest rates across the economy would be one result of failure to raise the debt ceiling. A financial market meltdown could be another. When business groups make common cause with the Obama Administration, it's obvious that failing to raise the debt ceiling is not what a weak economy needs.

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