US may require austerity measures
The US may require austerity measures, since a structural imbalance in its economy remains, according to Russell Investments’ global equities portfolio manager, Matt Beardsley.
Beardsley made the comment at a luncheon in Sydney on Friday, surprising a number of the attendees.
“In many ways, the US is as scary as Greece,” he said, adding that certain measures such as cutting spending and raising taxes would need to be discussed sooner rather than later.
Beardsley conceded that this was his personal view about the political and economic landscape of the US.
“But I think there will be a hard conversation coming — it’s just when does that happen? I think we’ll have that hard conversation sooner rather than later,” he said.
Beardsley said continued private sector spending was unsustainable, and that some politicians needed to take a stand in order to settle investors down.
“I think in many ways we face the worst pressures right now,” he said, adding that the US Government still had a monetary policy to encourage growth and avoid deflationary pressures. “But there is still this structural imbalance that must be addressed.”
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