Taking the whole world down with us

January 9th, 2004 – 7:35 pm
Tagged as: Uncategorized

How bad is the U.S. deficit getting? Bad enough that even the IMF is worried.

With its rising budget deficit and ballooning trade imbalance, the United States is running up a foreign debt of such record-breaking proportions that it threatens the financial stability of the global economy, according to a report released Wednesday by the International Monetary Fund.

Prepared by a team of I.M.F. economists, the report sounded a loud alarm about the shaky fiscal foundation of the United States, questioning the wisdom of the Bush administration’s tax cuts and warning that large budget deficits pose “significant risks” not just for the United States but for the rest of the world.

The Bush administration, of course, has dismissed the report, because they insist that the deficit will just magically go away (which is the only way that tax cuts and rampant spending could reduce a deficit), so there’s no problem.

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