Monday, April 23, 2012

The Pain In Spain Could Hurt The Rest Of The World

IBD
By ROBERT J. SAMUELSON

Just when you thought the world economy might be improving, along comes Spain. It's Europe's next economic domino, struggling to cope with big budget deficits, massive unemployment and an angry public. Will it fail — and, if so, with what consequences?

As it happens, the $80 trillion world economy splits roughly 50-50 between advanced countries (the United States, Europe, Japan and a few others) and developing countries (China, India, most of Asia, Africa and Latin America). Since the financial crisis, the advanced economies have struggled. In 2012, they will grow a meager 1.4%, forecasts the International Monetary Fund. Much of Europe is in recession; the United States (up 2.1%) and Japan (2%) grow slightly.


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