Bush Screwed Up Not Just The US, But The Entire World
The dilapidated state of the United States economy is dragging the entire world into a recession, the first global recession since World War II. The World Bank issued a report warning that what started in the United States threatens to turn back the clock on poverty reduction worldwide.
The World Bank also cautioned that the cost of helping poorer nations in crisis would exceed the current financial resources of multilateral lenders. Such aid could prove critical to political stability as concerns mount over unrest in poorer nations, particularly in Eastern Europe, generated by their sharp reversal of fortunes as private investment evaporates and global trade collapses.
The report predicted that the global economy will shrink this year for the first time since the 1940s, reducing earlier estimates that emerging markets would propel the world to positive growth even as the United States, Europe and Japan tanked. The dire prediction underscored what many are calling a mounting crisis within a crisis, as the downturn that started in the wealthy nations of the West washes over developing countries through a pullback in investment, trade and credit. Despite the United States’ position as the epicenter of the crisis, investors are flocking to U.S. Treasury bills and the dollar, squeezing developing nations out of global credit markets.
Economic slowdowns are occurring in 94 out of 116 developing nations, with 46 million people likley being pushed into poverty. And even non-third-world nations are being affected.
“I’m worried about what happens when you see that a Greece or an Ireland that might need bailouts,” said Simon Johnson, an MIT economics professor and former IMF chief economist. “Where is the money going to come from?”
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