Recently America has elected a new president. Blogger Matthew Yglesias has stated the winner “is poised to preside over a return to economic normalcy that’s bound to make any kind of basically competent governance look fantastic compared to the last decade of misery.”
The Congressional Budget Office (CBO) predicts 9.6 million jobs will be added in the next four years whereas Macroeconomic Advisors are aiming for 12.3 million . Nonetheless, things might be looking up for the American economy, but there is a threat of a “fiscal cliff” which Frederick Wong also explains in his blog.
Essentially, the fiscal cliff is a build-up of “of expiring Bush-era tax cuts, and decreases in social services.” The best method to avoid falling off the so-called cliff is by having the country go into more debt. This is quite risky as the country is already in unsteady economic conditions.
As Fred pointed out, Canadians have reason to worry since our economies are so close. Canada exports a lot of our resources to the US and if the states can no longer afford the goods, Canada will also suffer. Furthermore, this situation might give emerging economic countries such as China an advantage in the playing field.
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