Can the USA save the world?.....Would we want them to?

There will be many dates already underlined in the calendars of President Barack Obama’s campaign staff and those of Mitt Romney, his likely Republican presidential opponent. But it is a safe bet that May 4, June 1, July 6, August 3, September 7, October 5 and November 2 will be among them.

These are the seven days on which the Bureau of Labor Statistics (BLS) will release its monthly jobs report between now and a presidential election set to turn on who can prove most convincing to voters on the economy. While campaign advisers acquaint themselves with the schedule of the BLS, the small army of Wall Street forecasters paid to predict US growth are focusing on a date firmly in the political calendar.

December 31 is lining up to be the day fiscal austerity properly hits America for the first time since the financial crisis. Tax cuts, including those first introduced by President George W Bush, as well as a reduction in a payroll tax passed last year, are set to expire. Then, just two weeks into January, $1.2 trillion (£754bn) of automatic government spending cuts begin. Economists at Bank of America estimate that it all amounts to a fiscal contraction of between 3.5pc and 4pc of America’s gross domestic product. Read More