US Needs Austerity Too: Hedge Fund Strategist
By: Antonia Oprita
Wednesday, 9 Jun 2010
The United States will have to adopt austerity measures similar to the ones taken in Europe, because the problems faced are largely the same, Timothy Scala, macro-strategist at Sophis Investments, told CNBC.com.
On Monday, German Chancellor Angela Merkel presented plans to save 80 billion euros ($95.2 billion) by 2014 by cutting handouts to parents, axing 15,000 government jobs and delaying some construction projects financed by the government.
European Union Economy Commissioner Olli Rehn warned on Tuesday that euro zone countries may need to prepare more budget cuts, without specifying which ones.
And on Wednesday, German Chancellor Angela Merkel and French President Nicolas Sarkozy urged the EU to consider a wide ban on short selling of shares and state bonds, as speculation has intensified that some European states will eventually default on their debt.
In the US, a Treasury Department report sent to Congress shows that public debt will rise to 102 percent of gross domestic product by 2015 from 93 percent this year, to $19.6 trillion.