Michele Kearney's Snuffysmith's Blog

Is This Any Way to Treat Your Banker?

China recoils in horror at America's fiscal dysfunction.

BY SHEN DINGLI | JANUARY 2, 2013

SHANGHAI — At the last possible instant, the White House and Congress reached a compromise that prevented the United States from falling off the "fiscal cliff" -- or, as we in China have been calling it, caizheng xuanya.

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By raising taxes on households that make more than $450,000 a year, the negotiations will save middle-class families from tax increases and also will likely prevent the United States from going into another recession. China can relax -- for now. Given how deeply the Chinese and U.S. economies are intertwined -- in 2012, the United States imported more than $350 billion of goods from China while exporting just under $90 billion -- a U.S. recession would hurt China's labor force. China's exports to the United States grew at 9.4 percent from 2010 to 2011 and at a similar speed in 2012; if that number slows significantly or becomes negative, it would undercut China's economic prospects and even impair China's social stability. http://www.foreignpolicy.com/articles/2013/01/02/is_this_any_way_to_treat_your_banker