IMF, U.S. squabble over tackling twin deficits

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-08-03T180217Z_01_N03645105_RTRIDST_0_ECONOMY-USA-IMF.XML

WASHINGTON, Aug 3 (Reuters) - The global economy's watchdog is growing nervous.

For years, the International Monetary Fund has warned that swelling budget deficits in the United States -- its biggest and most influential shareholder -- were feeding global economic imbalances that threaten world growth.

Now, worried that Washington is turning a deaf ear to its warnings, the IMF plans to lean harder on the world's rich nations to help fix the U.S. trade deficit as well as slow growth in Europe and Japan.

In April, the fund complained in its semi-annual World Economic Outlook that politicians around the globe were not keeping their promises to tackle these imbalances.

<snip>

"The (U.S.) authorities have disagreed that the large U.S. current account deficit -- which they see as largely reflecting weak demand growth in key partners -- poses a significant risk of 'disorderly adjustment,' or that it argues for more aggressive fiscal adjustment," it said.

<snip>

If foreign investors decided to pull their money out, the dollar could tumble and U.S. interest rates could surge, damaging both the U.S. and global economies, the IMF says.

...more...

[wli]

1. here it comes

CAFTA, NAFTA, et al are all "reforms" like the IMF likes to impose on Third World countries. Now they're coming home to roost.

[Frederik]

2. I'm expecting

the US to be subjected to a "structural reform" package in order to receive credit from multilateral institutions within 10 years.

[Tempest]

4. Paul Krugman said it will be in less than that

Last year he said it would be within 7 years.

He was the first to say Bush is on an unsubstainable course, now many others (including the IMF) are jumping on the bandwagon.

[Tempest]

3. Why should the rest of the world fix the Bush made problems?

"Now, worried that Washington is turning a deaf ear to its warnings, the IMF plans to lean harder on the world's rich nations to help fix the U.S. trade deficit as well as slow growth in Europe and Japan."


If Europe's growth slows any more, they'll be back in a recession.

Is that really what the IMF wants? It would benefit the U.S., but the EU would suffer.

I'd tell the IMF to bugger off and ask where were they 4 years ago when the problem of the U.S. deficits first came to their attention.

[Penance]

5. Palast was right

Read Greg Palast's book "The Best Democracy Money Can Buy", specifically the chapters about Argentina and the IMF forcing them to open up their public utilities to private ownership. The US has a lot of public utilities, like water, that are efficient and cheap. In order to get control of them, Bushco are creating a financial crisis where the IMF can make "demands" on the US to "strengthen" its financial position by selling off its assets to Bushco's benefactors. The people controlling the US and controlling the World Bank are for all intents and purposes the same.

To see what the US will be like in 20 years if these people get their way, do yourself a favor and read Palast's book and do some research on Argentina' financial collapse.

[Tempest]

6. Look at Florida and how Jebbie is trying to privatize water there

A disaster in the making for ratepayers.


I'm familiar with Argentina's financial collapse.

Privatizing their SS program had a lot to do with it.

And it's the same course Bush wants to take.