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Finance minister underscores German concern over U.S. debt

By Catholic Online (NEWS CONSORTIUM)
September 11th, 2012
Catholic Online (www.catholic.org)

German Finance Minister Wolfgang Schaeuble has expressed his apprehension over the collective U.S. debt. While much of the world's headlines have focused on the eurozone debt crisis, Germany, by far the strongest economically of all European nations, is openly questioning how the U.S. could deal with its high levels of government debt after November's presidential election.

LOS ANGELES, CA (Catholic Online) - Schaeuble says concerns about U.S. debt were a burden for the global economy, hitting back at Washington which has criticized Europe for failing to get a grip on its own debt crisis. Schaeuble addressed these concerns in a speech to the Bundestag lower house of parliament.

German officials have privately expressed concern about U.S. debt levels coupled with the inability of American politicians there to reach a consensus on how to reduce it. Schaeuble's recent remarks underscore the extent of the worries in Germany.

"Ahead of the election in the United States there is great uncertainty about the course American politics will take in dealing the U.S. government's debts, which are much too high," Schaeuble said. "We need to remind ourselves of that sometimes and the global economy knows that and is burdened by it."

Budget deficits topping $1 trillion for three straight years have plagued the U.S. A weak economy and political gridlock in Washington have also prevented constructive debt reduction.

Republican candidate Mitt Romney has long accused President Barack Obama of fiscal mismanagement. The Obama White House in turn has been slamming Republicans in Congress for blocking government efforts to get the U.S. fiscal house in order.

U.S. lawmakers reached an 11th hour deal last year to increase the Treasury Department's borrowing authority, which had bumped up against a legal limit, averting an unprecedented default.

Treasury Secretary Timothy Geithner has warned the United States is likely to hit a $16.4 trillion borrowing limit by the end of the year.

Adding to the growing chorus of criticism, the Paris-based Organization for Economic Cooperation and Development has warned against a sharp fiscal retrenchment in the United States, saying this could derail the fragile recover there.

A new wave of U.S. spending cuts and tax hikes, which some have dubbed the "fiscal cliff" are set to take effect in January, within months of the November 6 election.

German Chancellor Angela Merkel has established a strong working relationship with Obama and they are of one mind on many foreign policy issues.

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