Economic Presence, at a Slow Pace

How fragile is the global economic recovery expected to be? Is it possible that the United States produces a relapse of productive, commercial and financial activities?

So far the global economic recovery looks a little uncertain. Worrisome news comes from the United States concerning the rise of unemployment, while in the European Union there is an increase in financial outlays to rescue countries like Greece and Portugal, who are in serious difficulties in honoring their external financial commitments.

The Organization for Economic Cooperation and Development (OECD) warns about the evident prospect of global economic shutdown. The OECD warns of the continuing increase of international oil prices, as well as the financial rescue packages to countries in Europe that are experiencing serious difficulties in paying off external obligations. In all of the above we add the discouraging work-related news that comes from the United States.

The U.S. Department of Labor has just revealed that during the last month of May, there were only 54,000 jobs generated, when expectations revolved around an increase of 150,000 new work placements. How do we bet on a sustained recovery in a time when the labor market indicators show a lack of generation of new jobs within the American economic geography?

But the truth is that the grounds of the White House have posed a shadow of concern before the picture, to the point where President Obama looks puzzled by the slow progress of the economic recovery process. He spoke of “headwinds,” among which he has cited high gasoline prices, the earthquake in Japan, and the concerns about the fiscal situation in Europe.

Yet the main wind blowing on U.S. economic geography is the result of an internal factor: the astronomical budget deficit that already accounts for 11 percent of Gross Domestic Product (GDP). This reality is unbearable, cites Ben Bernanke, president of the Federal Reserve.

And before this reality, the International Monetary Fund (IMF) has only limited itself to formulate a timid appeal to the U.S. government so that it pays attention to fiscal imbalances, without demanding a package of restrictive economic measures intending to reduce the budget deficit. The rigorous application of this adjustment program is imposed on debtor underdeveloped countries.

What we know is that the current American economic recovery process is fragile and slow. Meanwhile, it maintains a high rate of unemployment, alongside a growing fiscal deficit and an astronomical debt. There is no reason to bet on overcoming the structural problems that plague the land of the greenback.