Why the Global Economy Is Tanking

Last Sunday, legislators and the president, convinced that the United States was facing an imminent risk of default and their sound decisions were needed to wrest global well-being from the jaws of collapse, purportedly scrambled to announce a deal on the debt ceiling hours before the Asian markets opened. Instead of cheering the deal, however, global markets thumbed their nose and turned down within hours of the announcement. Indeed, the most striking response to the "successful" conclusion of the United States debt ceiling cacophony on Sunday was the sharp fall in global stock markets the next day. Then, on Thursday, the Dow plunged over 500 points, the biggest single-day loss since December 1, 2008, at the height of the financial crisis. Why the painful downturn?