UN Predicts Grim Economic Outlook for 2012
The world economy is on the brink of another recession and prospects for recovery will worsen unless the international community can strengthen cooperation, says the UN’s 2012 Report on World Economic Situation and Prospects.
“We have a situation where we may well be at risk of a double dip. In any case it is very likely there will be a further slow down.” says Jomo Kwame Sundaram, UN Assistant Secretary General for the Department Economic and Social Affairs (DESA).
Sundaram and DESA director for policy and analysis Rob Vos where at the UN to preset an overview of the report, which will be released in the new year.
Sundaram says today’s announcement by China that its manufacturing sector had shrunk over the recent period is an ominous sign, especially for developing countries that for the most part had continued to do reasonably well during most of the crisis.
“We do not have the basis for a strong recovery in the developed world and what is likely to happen in the near future is the further deterioration of conditions in the developing world.” he said. “This current situation, in the view of the Chinese, is worst than the last quarter of 2008.”
Sundaram says the international community has so far failed to take collective action and adopt preventive measures to ensure possible future European debt problems can be contained.
He says the complex political relationship between European national governments and the European Union framework, along with ideological differences between the White House and Congress have seriously limited any international consensus to addressing the crisis.
Rob Vos, Director of Policy and Analysis at DESA, says even in a best case scenario global economic growth will drop.
“We project that the world economy could grow to 2.6% next year, that’s slightly down from 2.8% but that is already a pretty strong deceleration from what happened in 2010 when the world economy was growing at 4 percent.”
Vos says projections are based on the assumption the European debt crisis will not reach the EU’s larger economies. But with both Italy and Spain coming under increased financial pressure, he says the worse case scenario is quite likely.
The report’s forecast also depends on Congress and the White House agreeing on the extension of payroll tax cuts and emergency borrowing benefits.
“If those two actions don’t happen, we estimate that the US economy could further slow by another one percentage point of growth next year, which would be further down from already slow growth of 1.7%.”
Vos says the US should also start thinking about short term stimulus measures to avoid an increase in home foreclosures, which he says continues to undermine the health of the banking sector and negatively impact the economy.
“There is weaknesses and some dangers in the mortgage market that because of the high unemployment, a lot of the home’s are underwater so to speak, that their debts are higher than the value of their homes, that there may be a need to give people more bridge loans to overcome those problems and to avoid more foreclosures.”
Education Costs, Health Care Will Likely Sway Youth Vote
By Adrianna McGinley
Youth leaders and policy experts cited rising costs in education, health care, child care, and housing as key issues for winning the young vote in 2012.
The discussion at the Center for American Progress was based on a recent report from the think tank Demos and the Young Invincibles entitled “The State of Young America”.
Heather McGhee, Demos’ Washington office Director, noted the report shows that while college tuition has tripled over the last few decades, federal aid has been cut in half. A maximum pell grant that she said covered 69 percent of costs in 1980, today only covers 34 percent. She added that in 2010 the amount of student debt surpassed that of credit card debt and 76 percent of participants in the study reported it has become harder in the last five years to afford college.
McGhee said these numbers make young people “more oriented towards public solutions, more willing to pay higher taxes for higher degrees of service from the government than any generation since the depression generation.”
Aaron Smith, Co-founder and Executive Director of the Young Invincibles, said Congress has the power to help youth but only if they make their voices heard. Smith cited Obama’s Affordable Care Act as “an example of how Congress can really step up to the plate and address one of these big long-term challenges,” and added it would be a grave mistake for Congress to repeal it in 2012.
“Going backwards is obviously, I think, exactly the wrong move…we’re going to be doing more work in the Fall to educate young people about what the health care law actually means for them,” Smith said. “Once you have the education I think then you’re prepared to sort of become an advocate, to tell your story, to explain ‘yes…I’m a young person, but healthcare really does matter to my life,’ and we found that when those stories are told, it can be quite powerful and change the political debate.”
The panel also touched on immigration issues.
Eduardo Garcia, Advocacy Associate for Campus Progress, said the 2012 election will depend on how the administration continues to deal with the undocumented population.
“Young people are very much feeling the impacts of some of the harmful deportation policies that the administration has adopted, and I think that it’s especially hurtful because many of those folks turned out in 2008 to get this president elected.”
The panel cited immigration reform as a possible key to economic recovery as well, saying that while 54 percent of all young adults have or want to start a business, that rate for minority youth is over 60 percent.
Ronnie Cho, White House Liaison to Young Americans and Associate Director of the Office of Public Engagement, said it is up to youth to make their voices heard.
“It is incumbent upon ourselves to really assert ourselves, not ask for an invitation to be a part of the discussion, because that’s simply not going to happen and it hasn’t happened…that’s why the discussion hasn’t been around how this affects young people,” Cho said. “It is our time to emerge as this force to be reckoned with.”
McGhee added that while young voters need to stand up, the federal government must continue to protect voters rights, citing that in 2010, 31 states passed voter ID laws that could inhibit youth from voting since over a third of 18 year olds do not have a federally issued ID.