Global Rebalancing: Now or Never. YaleGlobal. Stephen S. Roach. July 19, 2012.
Recent history, the Latin America debt crisis, the US subprime mortgage crisis and now the European debt crisis, offers a lesson that global imbalances are unsustainable. Lured by false promises of future growth, countries borrow big, risking prosperity and stability. Global growth is in question: Wary of debt, U.S. consumers have tightened spending; India and China, as emerging economies, cannot make up that spending in the global markets. Countries, particularly the world’s leading economic partnership, U.S. and China, must confront the reality on debt and ease their imbalances, urges Roach. He lays out a rebalancing plan that includes China building the services side of its economy. Roach warns, “There are no shortcuts to sustainable prosperity.” Americans must consume less, the Chinese should consume more, and all should consume sensibly. [Note: contains copyrighted material].
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