The Political Problem of a Economic Recesson

Markets are also beginning to worry about how policymakers in the U.K., Japan, and the U.S. will handle their soaring debts, all at unprecedented peacetime levels, relative to GDP. It’s not that governments don’t recognize the problem; it’s that, as last week’s OECD report documented, there is no evidence so far that the top politicians of any of these countries is remotely prepared for the significant tax increases and savage spending cuts that their out-of-control deficits will compel. The results could be soaring inflation or wholesale debt restructuring.
Newsweek