Word: exits
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...quickly other states may hit the wall will largely depend on how quickly we exit this recession. Will we emerge later this year? Not until next? It is easy to find an economist for whatever answer you'd like. That's not nefarious; it's just really hard to anticipate what the economy is going to do. For the fiscal year that just ended, revenues came in below expectations in 38 states, according to the National Association of State Budget Officers and the National Governors Association. And if projections are too rosy again in the just-signed state budgets? Well...
...suggest that a modest improvement in economic conditions is under way but that it's still very fragile and could use more stimulus. GM's lawyers warned in bankruptcy court that the company might have to start the liquidation process by mid-July if it is not guaranteed an exit from bankruptcy in the next 30 to 60 days. (On July 5, Judge Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of GM's assets to a government-run company.) Further, if a modest recovery in sales doesn't begin soon...
...loose fiscal and monetary policies as the economy improves. For example, raising interest rates - now effectively zero - too quickly could nip a recovery in the bud. "We need to be careful about the response of the market and the economy to the expected government's and central bank's exit policy," says Kanno. "Normalization policy may trigger the next downturn...
...still weak institutions in Latin America. Her Sunday setback "indicates that Latin America's hyperpresidentialist project, which was fueled by the economic boom, faces walls and obstacles now," says Javier Corrales, a Latin America expert who teaches political science at Amherst College in Massachusetts. Another factor is the exit of U.S. President George W. Bush, whose own bid for excessive presidential power wasn't exactly seen by Latin Americans as a model of democratic checks and balances. Today, the more collegial Obama presidency makes hyperpresidencies look less seemly. (See pictures of Barack Obama's family tree...
...hear a lot about going back to "the winning ways of Ronald Reagan." Well, I love Reagan too. But demographics no longer do. In 1980, Reagan beat Jimmy Carter by 10 points. If that contest were held again today, under the current demographics of the electorate per exit polls, the election would be much closer, with Reagan probably winning by about 3 points. (See pictures of polarizing politicians at LIFE.com...