A Recession Averted, But Long-Term Debt Is Looming Concern
In its annual forecast, the Congressional Budget Office says a recession has been largely averted but the economy remains under threat from long term debt. The CBO forecast finds a mismatch between tax revenue and spending over the coming decade.
According to CBO, if left unaddressed the debt will “have serious negative consequences,” including an increase in federal spending on interest payments and shrinking capital and wages.
“In addition, lawmakers would have less flexibility than they might ordinarily to use tax and spending policies to respond to unexpected challenges. Finally, such a large debt would increase the risk of a fiscal crisis, during which investors would lose so much confidence in the government’s ability to manage its budget that the government would be unable to borrow at affordable rates,” says the CBO.
Emerging Acceptance Of Slow Growth As The New Normal
While it is good news that another recession appears to have been averted, some warn there is a growing acceptance of slowing growth as a component of the “new normal.”
Nations probably never choose decline, at least not consciously. More likely they become victims of a creeping normalcy. Things once objectionable can become passively acceptable if they happen slowly, incrementally: the boiling-frog syndrome. Decline just sort of happens, year by year, decade by decade, one “meh” economic report at a time,” writes James Pethokoukis of the American Enterprise Institute.
CYBER WARFARE POSES THREATS AND CHALLENGES
Tackling Next Generation Warfare
In a world connected by technology (and increasingly dependent upon it), the potential of a few to inflict incredible damage on the global economy is real and of great concern to experts.
“”Cyber weapons can easily be used against innocent victims, especially because our infrastructures have been developed over 30 years ago and they haven’t been updated,” Costin Raiu, director of global research and analysis at Kaspersky Labs, tells the website Mashable.
The breadth of the problem of cyber security is reflected in the range of sectors targeted in just the last week. On Tuesday, the Federal Reserve Board publicly acknowledged their websites were hacked, which comes on the heels of attacks on the websites of both the Wall Street Journal and The New York Times by Chinese hackers and a break in at the Energy Department.
Not discounting the threat posed to financial markets and energy grids, both Pace University professor James W. Gabberty and James A. Lewis of the Center for Strategic and International Studies note that the interconnected nature of global economies, notably US and China, would make a large-scale attack counterproductive.
Government Moving (And Struggling) To Address Cyber Warfare Nor should it be news to learn the US government is actively moving to shore up its cyber defense, even going so far as to conduct reviews of international laws to determine if the president has authority to launch a pre-emptive strike.
Need To Update Domestic And International Laws
The increasing frequency of cyber attacks, however, underscores the need to adjust both national security policy and the international legal framework.
Jeremy and Ariel Rabkin of the Hoover Institution address the next generation of warfare, in particular how the uncertainty of the legal environment has caused many governments to adopt a wait-and-see attitude as international law lags behind the emerging threat.
“In exploring the options for dealing with a cyber attack from abroad, we should at least try to shake off the constraints of outdated or irrelevant legal norms. The UN Charter was designed to prevent another world war. Whatever benefits we have obtained from that framework over the past sixty years, the Charter regime has coincided with hundreds of small wars and a number of large wars to which the Security Council remained largely irrelevant,” they note.