Neil Irwin asks the “giant question” for 2016: How resilient will the United States prove to be?
“On one hand, in an interconnected global economy, troubles in one place can spread easily, whether through financial markets, the banking system or trade linkages … On the other hand, in the past the United States has shown an uncanny tendency to benefit economically from tumult abroad.”
“There are two basic questions about the notion that the United States can serve as an island of economic and political stability in a messy world. First, what happens if that changes? Second, what happens if it doesn’t?”
“The ‘things change’ situation is the risk that these global headwinds become too powerful for the United States to overcome.”
“The longer other global economies remain a mess and the United States remains on a relatively steady course, the more these same forces will reassert themselves. This means that an ever-strengthening dollar will hobble American exporters while fueling an American consumption binge. Broadly, it would mean that crisis-era hopes of a more balanced global economy might not come to fruition.”
“The best thing that could happen for the global economy would be for the mismatch between the United States and the rest of the world to end — and not because the United States falters.”