By David Burridge, Economics Editor
So it has been a while since we’ve had a doomsday prophecy about the Eurozone, the budget wasn’t so bad after all and all has been quiet in America as their economy crawls it’s way to recovery.
Things seem to be looking up, especially for Obama & Co, but are they when you scratch beneath the surface?
Well to start with employment in the States is at a three-year low (8.3%) after five straight months of consecutive declines. Excellent news for Obama with a forth coming election.
19.2% of people surveyed in America expected business conditions to improve over the next 12 months. Hardly a headline figure but a step in the right direction when compared to recent times.
American consumer confidence for March was slightly down on February but still much higher than it has been of late. March’s rating was 70.2 where as February’s was 71.6, the measure was at 53.7 during the recession in 2009. An improvement European governments can only dream of.
However whilst all seems rosy on the surface a quick look at the US national debt clock soon brings any escaping positive emotion back in check. Some very nasty looking figures jump out;
US national debt stands at a staggering $15.5 trillion- 103% of GDP.
Interest on debt is at $226 billion per year.
US total debt (including business and household debt and local government debt) stands at an eye watering $57 trillion dollars which means each citizen owes $182,000.
Debt isn’t always as bad as is made out, there is a level of debt which is arguably healthy to maintain and debt allows the government to sensibly stimulate the economy when it needs it. Then there is an unhealthy level of debt which has very high servicing payments and acts rather as a weight around the neck.
The US currently resides in the second category.
In the short-term the recovering US economy will provide a boost to consumer confidence worldwide. Increasing demand in the US economy creates demand for British exports and drives the world economy. So whilst the glum looking national debt for the US remains staggeringly high it remains distinctly easier for everyone (right or wrongly) to simply ignore it for the time being and look forward to the prosperity heading our way from our western cousins.