Austerity Programs Doomed to Spread from Eurozone to U.S.

10 Jun

Debt Spreading ‘Like a Cancer’: Black Swan Author

By: Barbara Stcherbatcheff
Writer, CNBC

The economic situation today is drastically worse than a couple years ago, and the euro is doomed as a concept, Nassim Taleb, professor and author of the bestselling book “The Black Swan,” told CNBC on Thursday.

Nassim Taleb
CNBC.com
Nassim Taleb

“We had less debt cumulatively (two years ago), and more people employed. Today, we have more risk in the system, and a smaller tax base,” Taleb said.

“Banks balance sheets are just as bad as they were” two years ago when the crisis began and “the quality of the risks hasn’t improved,” he added.

The root of the crisis over the past couple of years wasn’t recession, but debt, which has spread “like a cancer,” according to Taleb, who is now relived that public attention has shifted to debt, instead of growth.

The world needs to prepare itself for austerity, he warned. “We need to slash debt. Unfortunately, that’s the only solution,” Taleb said.

Other analysts warned about austerity programs spreading from the euro zone to the US where the growth in debt will become unsustainable over the longer term.

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3 Responses to “Austerity Programs Doomed to Spread from Eurozone to U.S.”

  1. geopoliticsnews June 15, 2010 at 3:50 am #

    Of course, but it is inevitable! Because the babyboomer generation that has enjoy all the riches of this world without really paying for it are about to retire, taking with them money that never really existed! So our elite, is going to take all there money and make it disapear… Of course in this process, they will manage to earn REAL powers instead of money, by controlling our lives even more with those austerity programs!

  2. geopoliticsnews June 15, 2010 at 3:52 am #

    But then again, this world can’t afford to always seeks profits over profits, because our planet can’t sustain exponential growth since it has limited resources to share! In other words, the party is over for generations to come!

  3. geopoliticsnews June 15, 2010 at 5:35 am #

    Another hypothesis: What if this austerity plan was to prepare the world population for 2012? It makes senses to me, since with such plan, peoples will begin to be more conscious about saving and consuming less. Otherwise the departure would be too much radical if an event of such global magnitude hit our industrialize and materialist world! This plan, will therefore prepare the population to accept less comforts, less needs which will make them less depress when the event begins to hit us!
    As for why the US might not follow, I wonder… Too much political polarization maybe, as everyone follow the blue or reds, while avoiding talking about the true things that matter really!

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