Report: Obama Team Has Dire Economic Outlook

The Atlantic:

It's quite unsettling to talk to members of Barack Obama's transition teams these days, especially those who are helping with the economics portfolio. Without going into details, the sense I get from them is that they are very worried that the economy will get a lot worse before it gets better. Not just worse... a lot worse. As in -- double digit unemployment without the wiggle factors. Huge declines in aggregate demand. Significant, persistent deficits. That's one reason why the Obama administration seems to be open to listening to every economist with an idea and is stocking the staff with the leading lights of the field. In one sense, the general level of concern among Obama advisers and transition staffers is reassuring; they get the magnitude of the problems, and they're not going to assume that, just because the bottom has never dropped out before -- certainly not in the lifetimes of most people doing policy these days, the bottom will never drop out.

Where the discussion isn't going, at least in public, (or the PR level), is the possibility that the first foreign policy crisis the administration will face will be the complete economic collapse of a large, unstable nation. To be sure, Pakistan is nearly broke, and U.S. policy makers seem to be aware of that; but a worldwide demand crisis could lead to social unrest in countries like Indonesia and Malaysia, Singapore, the Ukraine, Japan, Turkey or Egypt (which is facing an internal political crisis of epic proportions already). The U.S. won't have the resources to, say, engineer the rescue of the peso again, or intervene in Asia as in 1997.

Read the whole story: The Atlantic

Comments

[JapanDan]

If I were Obama, I'd demand a recount!

Unfortunately, Obama will preside over the collapse of the US of A. As I watch the downward spiral of the US economy, I can't help but be reminded of books like "Tipping Points" and "Mega-Trends", and cannot hope for any better than a re-alignment of America's place in the world. The image of those "extreme" skiers, who, having lost their balance, tumble uncontrollably downward, slamming into rocks, limbs flying, sliding finally to a stop as a broken heap, is what comes to mind these days.
Americans don't have the money to buy stuff.
which means....
Other Americans can't sell stuff.
which means....
Other Americans won't make stuff.
which means....
Americans don't have the money to buy stuff.
But there's always CREDIT.

[djgonebad]

HOW ABOUT SOME DEBT RELIEF, FOR THIRD WORLD COUNTRIES UP TO THEIR EYEBALL IN WORLD BANK DEBT?!!

[BOBONDE]

EVERY TIME THE GOP LEAVES THE WHITE HOUSE THEY LEAVE BEHIND A RECESSION OR DEPRESSION, THEY ARE THE CANCER OF SOCIETY.

[deminmo]

Mr. President-Elect,
I think the one nation that right now could be your biggest
problem, is this one. What happens here does effect
everything else. Remember the original $700+B
back and forth? Asian markets were the first to show signs
of distress and then it went wild. We just had the Republican
Senate members fillabuster the bridge loan to GM and Chrysler
and that might mean wide ranging effects. Sir we have a
situation that's very dire, and may just crash even before you
have a real shot at changing anything.

[lynnn]

See what the southern Sen. forgot is this is a global crisis. There won't be foreign auto factories in any part of this country in a yr.

[whoknew---]

Dear Santa.

All I want for Christmas is a stable global economy,

Please deliver because most people planted on this globe have been relatively good,

So hopefully you will make good on this request,

Signed a very concerned adult that wants to believe in miracles.....

[MyDadLovesReagan]

You know the economy's bad when the value of gold is better than cash; especially the value of gold teeth. Check it out: http://www.twentyfourbit.com/post/64391860/bad-economy-forces-dj-to-sell-gold-teeth

[OmnesOmnibus]

Egypt is on the verge of collapse for sure. Pakistan? Terror Central. Yes it's a mess. Better get ready to hunker down.

[worldview47]

HUFFPO, are you talking about the USA or PAKISTAN?...I am disappointed in your headline...be specific and maybe transparent////

[jsarets]

"What you have told us is rubbish. The world is really a flat plate supported on the back of a giant tortoise." The scientist gave a superior smile before replying, "What is the tortoise standing on?" "You're very clever, young man, very clever," said the old lady. "But it's turtles all the way down!"

Money is debt. Every dollar is just a token representing the fact that somebody owes somebody else a dollar plus interest. Where does the interest come from? More interest-bearing debt!

You see, the global economy is really a tower of debt, and it's debt all the way down!

Nobody has any money that isn't debt, and everybody is beginning to have problems keeping up with the debt obligations that everybody owes to everybody else. Why? Because the global supply of energy per-capita has been declining for the past several years with no end in sight, and the global financial industry has just about given up all hope for the long-term exponential growth in consumption necessary to sustain the payment of interest at any positive percentage rate.

Money is debt. If we can face it, we can fix it.

[MrKINOKO]

Wow. That's a HuffPost pick if I ever saw one...great posting.

[stell]

Obama should have known that he was getting set up to take a bum rap.

[lynnn]

Yes bc Obama is stupid, just like FDR.

[Raster]

Obama's hiring every economist he can find? What have those charlatans ever done except kiss up those who employ them. They won't come up with anything really useful. BO better start pouring money into a WPA-type agency like FDR did in the 1930s. Make work jobs are far better than no work.

[Tchalla]

Seems to me that in the present day the notion of borders is really artificial. The interconnected global economy, climatic challenges and the international impact of terrorism suggests that the the old way of thinking about US independence and power both military and economic just won't cut it. What is needed is a coordinated global response to the challenges being faced. As well as listening to home grown ideas might be an idea for economist etc from outside the US to be given a voice also.

[WorkingClass]

Its the end of consumerism and nobody knows what will replace it or when. The United States is at the epicenter of the world economic collapse. Over the next six months many millions of Americans will lose their jobs. Just when it cant get any worse (second half next year) hyper inflation will kick in and EVERYBODY except the very rich will be destitute.

Bad boy bad boy - Whatcha gonna do?
Whatcha gonna do when they COME FOR YOU?

[Lotus19]

Well at least you still have your sense of humor.

[manitoumackinac]

Sounds like a recipe for WWIII. Hope people don't forget that Fascism was a result of bad economic times.

[deminmo]

Bush has 39 days in office. Scary, ain't it?

[LeeCalif]

ummmm ...... ah ......... and ah, what about this unstable nation? Keep printing money ??