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US lacks credibility on debt, says IMF

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posted on Apr, 12 2011 @ 05:21 PM
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The US lacks a “credible strategy” to stabilise its mounting public debt posing a small but significant risk of a new global economic crisis, says the International Monetary Fund.

In an unusually stern rebuke to its largest shareholder, the IMF said the US was the only advanced economy to be increasing its underlying budget deficit in 2011 at a time when its economy was growing fast enough to reduce borrowing.

To meet the 2010 pledge by the Group of 20 countries for all advanced economies – except Japan – to halve their deficits by 2013, the US would need to implement tougher austerity measures than in any two-year period since records began in 1960, the IMF said. In its twice-yearly Fiscal Monitor, the IMF added that on its current plans the US would join Japan as the only country with rising public debt in 2016, creating a risk for the global economy.

Carlo Cottarelli, head of fiscal affairs at the Fund, said: “It is a risk that if it materialises would have very important consequences ... for the rest of the world. So it is important that the US undertakes fiscal adjustment in a way sooner rather than later.”

At the moment, the US has outlined less than half of the tax increases and spending cuts necessary to bring its public debt down in the medium term, the IMF calculated. “More sizeable reductions in medium-term deficits are needed and will require broader reforms, including to social security and taxation,” the IMF said.

The IMF said the US economy “appears sufficiently strong” to withstand greater austerity measures and tax increases, adding that the benefit of last year’s stimulus package “is likely to be low relative to its costs”.


www.ft.com...

So you guys in the US, how do you feel about the economy there? Do you feel your economy is sufficiently strong enough to weather tougher austerity measures? Or should the IMF keep their optimism and pontificating mouth shut?




posted on Apr, 12 2011 @ 05:27 PM
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Cut all unnecessary spending and we can do it. End foreign aid, corporate welfare, end the three wars, bring all troops home, cut congressional pay and benefits to the average for their state, cut npr/pbs, cut SS, medicare, medicaid and all other entitlements.



posted on Apr, 12 2011 @ 05:35 PM
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reply to post by sonofliberty1776
 


I think even with all that, it would still be impossible to crawl out of this hole we're in. It's going to take a total awakening and a shift in consciousness to start a world where things of necessity are abundant.



posted on Apr, 12 2011 @ 05:51 PM
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reply to post by sonofliberty1776
 


Abolish departments.

DHS, ATF(since apparently the only thing they're good at is demonizing gun owners and smuggling guns into Mexico) The Dept. Of Education the Energy Dept....I can think of many more agencies. Like HUD, HHS and others.



posted on Apr, 12 2011 @ 05:52 PM
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What baffles me is when economists say that we are on the way out of the reccesion. There are so many toxic investments out there that I dare to call this situation a depression. Investors are clinging to the oil and gold as safe-havens for their money. I think there is something fundamentally flawed with the system. Our woes will not be over until we at least try to admit that those things have to be fixed.



posted on Apr, 12 2011 @ 07:12 PM
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reply to post by surrealist
 


Austerity measures and tax increases? No thankyou. That is all. Move along.
Seriously who cares what the IMF says anyway. Screw those guys.



posted on Apr, 12 2011 @ 08:17 PM
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The US pays a $43 Billion annual quota to the IMF, accounting for around 20% of their total funding...
I say it's time for the IMF to experience a little austerity and the United States to send a photograph of Uncle Sam's middle finger instead of that fat check the next time the IMF comes calling. Furthermore, considering how many trillions of US dollars were given to foreign banks to bail them out, so the IMF wouldn't have to, I think a little shakedown money is due to the USA from the IMF.

Damn, remember when the US had leaders that actually possessed testicles and freely swung them in front of globalist organizations like the IMF? Sad times indeed...



posted on Apr, 12 2011 @ 09:37 PM
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reply to post by burdman30ott6
 


Agree with you there sir.

You know, I wonder if all the bickering going on between the Reps and Dems over the budget deficits and debts and so on, is to soften and concilliate US masses to be more receptive to austerity measures. The outcome to fiscal policy is the same as those European countries, the plebe in the end pays, but the delivery of the policy is to work up a crisis to the point where people more willingly relinquish some of their entitlements and conditions to avert the crisis. In other words, it is all clever manipulation and so many are falling for this crap. Seriously the rich(er) people in society have a far louder and more powerful lobbying voice than their poor(er) counterparts.



posted on Apr, 12 2011 @ 09:49 PM
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reply to post by surrealist
 


It's funny how the IMF solution for us is austerity measures and higher taxes for Americans. What a Joke. why don't they recommend reducing the size of government by 50% first. They will just squeeze the little guy!



posted on Apr, 12 2011 @ 11:10 PM
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Why would anyone ever doubt the ability of our fine government to pay it's loans? Think about it... we're the only country in the world that can simply print more money whenever we get low, or if we decide to invade another country. If any other country gets into serious financial trouble, investors could literally lose their entire investment!

OTOH, if investors ever need to pull their money out of the U. S., we'll just print it right up!

Now, granted, this is just a short-term solution, but if you really think anyone in our government is working toward any kind of long term solutions, you're kidding yourself.

It's not even all bad, if you think about it. As inflation kicks into high gear, all these "upside-down" mortgages won't be upside down anymore. Hell they might even be able to take out another mortgage!! Party ON!!

Sure, it's gonna catch up to us eventually. If you think we can work or grow our way out of this mess, you're either blind or seriously misinformed, imho.... Just my 2¢



posted on Apr, 13 2011 @ 10:34 AM
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Just because the IMF is evil, it doesn't make their opinion wrong: the US government DOES have an enormous problem with deficit and debt, and as the IMF points out, the federal government doesn't seem to be addressing this issue seriously.



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