Attempts at austerity and deleveraging in Europe have converted an economic problem into a political dilemma, with leftist governments rising against Germany's austerity-laced rescue packages. Germany now faces a tough economic decision that will involve choosing between a breakup of the current euro system and a movement toward a common fiscal policy in Europe.

The longer the financial crisis in Europe drags on, the greater the risk of a European economic collapse with substantial additional negative spillover effects on the United States and the rest of the global economy.

In the second half of 1996, U.S. interest rates and perhaps U.S. inflation are being held down by fortuitous (from the standpoint of the United States) economic slowdowns in Japan and especially in Europe.

In the second half of 1996, U.S. interest rates are being held down by fortuitous (from the standpoint of the United States) economic slowdowns in Japan and especially in Europe.

As fiscal stimulus packages unwind, fiscal drag may rise in the United States to a level equivalent to about 1.5 percentage points of GDP early in 2012.

China's new leadership is threatening to stay content with slower economic growth, and the country's manufacturing, housing, and export sectors are experiencing problems. Nonetheless, China has an opportunity to influence economic growth in 2012 through stimulus measures to its own economy.

The world saw such extraordinary uncertainty in 2011 that a simple failure to repeat that debilitating climate of uncertainty in 2012 may engender a moderate recovery, especially in the US economy.

Europe is now battling an acute systemic debt crisis that threatens the global financial system and the global economy. This worsening crisis constitutes the largest single threat to the US economy and its financial system