US Economic Crisis Dangerous to the World Economy

Atty. Vanessa Fluker at MECAWI meeting speaking on predatory lending at Central United Methodist Church on December 8, 2007. The meeting is part of a fightback campaign to declare a moratorium on foreclosures in Michigan. (Photo: Abayomi Azikiwe).
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U.S. economic crisis dangerous to the world economy

By Susana Lee, Granma daily

THE current financial crisis and recession in the United States, its impact on Latin American economies, developed countries and other regions such as Asia, with the increasingly clear possibility of its global generalization, with serious and unpredictable consequences, was one of the central issues addressed yesterday during the first day of the 10th International Conference on Globalization and Problems of Development.

Members of the commission devoted to Monetary and Financial Problems focused on the condition of the U.S. economy from several different points of view, but, in one way or another, all agreed that it dominates the international economic situation.

The "contagion effect" derived from the predictable deceleration of the expansion rate of the U.S. economy was repeatedly mentioned in different papers in the context of events and examples such as the recent real estate mortgage crisis in the United Kingdom and Spain; the situation of the Indian and Chinese economies, which depend on exports and their profitability; and the multi-million dollar losses by important European and Japanese banks.

The debate itself as to whether or not the U.S. economy is in recession revealed the varied criteria of the speakers. What was unquestioned is that the current crisis will lead to a recession and that its effects will be the worst in decades.

The U.S. growing trade deficit and current debt, unsustainable in the long term, as recognized by practically all economists, and which has led to a marked increase in its net external debt; the decrease in the value of the dollar since 2002; the constant increase in the price of oil and raw materials, were likewise fully discussed.

Also addressed were the European vision of globalization, the principal dimensions of South American integration, as well as the condition of and prospects for the economy of Latin America and the Caribbean.

Translated by Granma International