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Its all about debt, stupid

18 minutes
First broadcast:
Friday 04 November 2011

It's all about debt, stupid.

The eyes of the world have been on Greece and its unsustainable national debt, but the world's biggest economy, the United States of America has also run up vast debts and the amount it needs to borrow dwarfs the sums that Europe's planning to pump into its bailout fund.

Solving the problem, easing the debt burden, is pretty straightforward - in principle. Just like a household that is overspent, America and Europe need to spend a bit less and - ideally - earn a bit more: they need to cut public spending and raise taxes.

Easy in principle, not so easy in practice. Justin Rowlatt interviews Bob Pozen, a senior lecturer at Harvard University and a senior fellow at the Brookings Institute who has also been an advisor to Republican Presidential contender, Mitt Romney.

And, we have Bob Diamond, the chief executive of one of the world's largest banking groups, British-based Barclay's Bank, talking to the BBC's John Humphrys about how the world's banking sector needs to be reformed.

Plus, we have a report from the BBC's Middle East Business Reporter, Katy Watson in Tunisia. Just a few weeks ago Tunisians went to the polls to elect a constitutional assembly - a development that's being seen as the first step to the country's democratisation - but its economic challenges are as tough as ever, as Katy explains.


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