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By Brahma Chellaney
Beijing's creeping aggression signals a challenge to U.S. presence in the Asian Pacific
Independent voices from the The Washington Times Communities
Topic - Ward Mccarthy
Worries about the federal government’s “fiscal cliff” are taking a toll on the economy well ahead of the year-end deadline, which analysts say is looking like it may be more damaging in the run-up than in the reality.
Jobless rates are down both because some people are finding work and because some people have stopped trying, economists say. The big question: Who are all these people who have given up, driving the share of able-bodied Americans in the labor force to a 30-year low of 63.5 percent last month?
Despite much fanfare at a summit last week, European leaders failed to convince global investors that they are on their way to solving their massive problems with debt and recession.
Global markets recently fixated on the budget fight in Washington, but have remained mostly calm, in part because many investors think the Treasury Department will be able to avoid default for at least a week or two beyond the Aug. 2 "drop dead" deadline touted by the White House.
While Congress and the White House still have more than two weeks to raise the debt ceiling before the Treasury Department's early August deadline, the financial markets are getting jittery, fearing they won't reach a deal in time.
Some lawmakers and market analysts are expressing rising concerns that a demand for capital by earthquake-ravaged Japan could lead it to sell off some of its huge holdings of U.S.-issued debt, leaving the federal government in an even tighter financial pinch.
Call it the "Rodney Dangerfield Recovery." It gets no respect from any quarter. Republicans pound away at its weakness, Democrats lament it, the media chronicles its troubles, investors fret about it, and many average citizens question whether it even exists.
"As anxiety and uncertainty about the fiscal cliff have increased, businesses have made the prudent decision to delay investment spending decisions," Mr. McCarthy said.
"The closer the politicians take the economy to the edge of the cliff, the greater will be the associated anxiety and uncertainty that fiscal policy will generate an economic calamity, and the more damage that will be done," he said.