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Sunday, July 8, 2012

Four Reasons the Economy Can't Hit 'Escape Velocity'

Escape Velocity Nova
Escape Velocity Nova (Photo credit: Wikipedia)
Economists call it "escape velocity" — the ability of a slow-moving country to finally hit a speed beyond fits-and-starts and into a durable recovery. Trouble is, the U.S. isn't there yet, even three years after the end of the last recession, and judging by Friday's jobs report no closer to getting there than it was two years ago.
There are some obvious reasons why the American economy remains stalled — fears over Europe and the so-called fiscal cliff to name two — but there are other reasons less obvious that are turning escape velocity into inescapable mediocrity. "These issues, as difficult and intangible as they are, might be more important to the U.S. than anything to do with the European crisis," Jim O'Neill, head of Goldman Sachs Asset Management, said in a CNBC interview Friday. Indeed, there appear to be four key problems with the U.S. economy outside the usual suspects: ... Continue to read.
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