The U.S. economic morass just gets worse and worse, but the presidential election is unlikely to offer a solution, says Pimco CEO Mohamed El-Erian.
That’s because “[s]adly, neither [President Barack] Obama nor [Republican Mitt] Romney has yet offered a meaningful, forward-looking economic reform program to address the problems,” El-Erian writes in Foreign Policy.
Those problems include a malfunctioning labor market, unsustainable public finances, a broken credit system, inadequate infrastructure and a lagging education system.
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
“[T]here's no guarantee that either man has the ability to get at the root of the problem or even understand the severity of the crisis,” El-Erian says.
And that creates a great risk for the entire world — “that a lack of vision and political courage ends up leading to even greater economic disappointment and financial instability, bringing with it the social unrest we've seen in so many other countries over the past 18 months,” he writes.
The U.S. economy grew only 1.3 percent in the second quarter, and government debt has ballooned to $16 trillion, more than 100 percent of gross domestic product.
El-Erian isn’t the only one worried about social unrest.
Societe Generale strategist Dylan Grice fears the “Great Disorder,” as he terms it in a report cited by Business Insider. That disorder — monetary easing by the world's central banks — could be “of the sort which has ... scarred whole generations,” Grice says.
“All I see is more of the same — more money debasement, more unintended consequences and more social disorder.”
Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did
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