The global financial crisis that began four years ago has morphed into a political crisis for the United States and Europe. Leaders incapable of wrestling their debt loads to manageable levels or reviving strong economic growth are stoking turmoil in markets and populist unrest among the citizenry.
The political malaise is also hastening the shift of world economic power toward developing countries led by China. At worst, it could cause a second global recession bringing with it political upheaval on a scale not seen since the 1930s.
These unpalatable scenarios are being sketched by a growing number of leading political strategists, academics and economists after an extraordinary year when the once unthinkable came to pass: the United States had its credit rating downgraded while the developing world enjoys upgrades; Europe went cap in hand to Beijing for a financial bailout; and Brazil overtook Britain within the G7 club of major economies.