The U.S. economy remains in big trouble, says economist and economic historian Niall Ferguson.
Not screwed “the way Japan is screwed or even the way the Euro zone is screwed but … certainly not out of trouble,” Ferguson tells the Business Insider.
“I doubt very much if the United States is going to repeat the Japanese experience. Even if it did, it would hardly be a good outcome.”
At the moment, Ferguson says he thinks a scenario in which the U.S. “debt mountain won’t go away, the dollar refuses to depreciate fast enough to reduce the debt burden, the economy doesn't grow very fast, and significant social and political problems ensue because I don't think Americans will take it lying down” is the most likely.
“To see where we'll be even a year from now is difficult if there is a shift in bond market sentiment, if there is a big move in currency markets,” Ferguson says.
“Right now the U.S. is indeterminately pursuing fiscal and monetary stimulus while the rest of the world is putting their foot on the break. At some point I think that has to end … I think the Congress and President are going to face an incredibly difficult decision and I have the sense by the way that those risks are being underestimated at Davos this year.”
Fox News reports that U.S. House of Representatives Speaker John Boehner said the United States won't default on its obligations, but must reduce spending at the same time it raises its debt limit.
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