Politics, Society

IMF: United States Lacks Credibility on Debt Reduction

The International Monetary Fund has finally stated the obvious: the United States lacks any “credible strategy” to stabilize its mounting debt — and our lack of restraint is now posing a threat to the world economy. The IMF does not mention President Obama’s decision to launch a third war and spend billions in Libya.


In the meantime, Obama is reportedly about to call for higher taxes. The failure of the Democrats to deal with the debt crisis and the decision to go to war in Libya will undermine the credibility of the Administration on the issue. Because of their failure to control congressional spending for years, the Democrats will now go into the next election with a demand for higher taxes and record spending. This is not to forget the wasteful and wild spending of George W. Bush. However, the Democrats had an opportunity to show greater fiscal control and anti-pork policies. They did not.

The IMF rebuke is well deserved. What is astonishing is that we have political system that appears immune from the disaster caused by leaders of both parties.

Source: FT

116 thoughts on “IMF: United States Lacks Credibility on Debt Reduction”

  1. If you or any member of your IMF team is caught, the Director will disavow any knowledge of your existence. This country will self-destruct in five to ten years.

  2. Both major political parties have proven time and again that they are not trustworthy with our federal budget nor guarding our liberties. We must turn our backs on them and give the minor parties the opportunity to win our trust.

  4. Obama kept all the ol’ boys and those numb-nuts lacked the intellectual vision needed to solve the problems. Obama has no excuse as he was warned over and over again that failure to bring really smart people on board would result in failure. He is now reaping that which he sowed.

  5. If the present world economy soon totally collapses, (Jared Diamond?) will that likely make things better or worse after a thousand more years?

    What about the view of Stavrianos, “The Promise of the Coming Dark Age”?

  6. “The failure of the Democrats to deal with the debt crisis and the decision to go to war in Libya will undermine the credibility of the Administration on the issue. Because of their failure to control congressional spending for years, the Democrats will now go into the next election with a demand for higher taxes and record spending. This is not to forget the wasteful and wild spending of George W. Bush. However, the Democrats had an opportunity to show greater fiscal control and anti-pork policies. They did not.”

    I can’t think of a better way to sum up our present clusterf**k – Well said, Professor.

  8. When 2011 began, Macroeconomic Advisers, a forecasting company, expected that America’s economic output would shape up to rise at a 4.1 percent annual rate in the first quarter, the highest pace in over a year.

    But economic reports coming in over the last few months have been increasingly disappointing.

    Today, after an especially weak report on February’s trade deficit, the group’s economists lowered their first quarter G.D.P. estimate to a sorry 1.5 percent annualized. If borne out, that rate would be slower than each of the last two quarters, at a time when the economy desperately needs to be rocketing forward so that companies will hasten their hiring.

    The Commerce Department will release its preliminary number for first quarter G.D.P. on April 28.

    http://economix.blogs.nytimes.com/2011/04/12/g-d-p-forecast-for-first-quarter-slides/?partner=rss&emc=rss

  9. At a time when the economy should be rebounding the latest GDP number for the first quarter of 2010 shows that the Obama economic policies have failed.

  12. “The U.S. economy has become alarmingly dependent on government stimulus,” said Madeline Schnapp, director of Macroeconomic Research at TrimTabs, in a note to clients. “Consumption supported by wages and salaries is a much stronger foundation for economic growth than consumption based on social welfare benefits.”

    The economist gives the country two stark choices. In order to get welfare back to its pre-recession ratio of 26 percent of pay, “either wages and salaries would have to increase $2.3 trillion, or 35 percent, to $8.8 trillion, or social welfare benefits would have to decline $500 billion, or 23 percent, to $1.7 trillion,” she said.

    http://www.cnbc.com/id/41969508

  13. EDITORIAL: Kagan’s government money grab
    Obama team makes feds, not citizens, supreme

    When President Obama outlines his tax-increase plan on Wednesday, it’ll be based on the liberal assumption that all money belongs to the government, with Americans retaining only what bureaucrats allow. That’s the dangerous argument Supreme CourtJustice Elena Kagan, an Obama appointee, made last week in a case on education funding.

    Arizona Christian School Tuition Organization v. Winn involved a tuition tax credit whereby Arizonans can contribute to groups providing scholarships for private schools. Some cranks argued that because the scholarships can be used at religious schools, the tax credit amounted to unconstitutional government support for religion. The Supreme Court majority ruled that the complainants didn’t have legal standing to sue because none of their own tax money was being funneled to religious organizations.

    http://www.washingtontimes.com/news/2011/apr/12/kagans-government-money-grab/

  17. Anybody here heard of an outfit called ‘Waterfall TALF Opportunity?’

    Matt Taibbi wrote about them. Waterfall TALF is a case study in welfare for the wealthy. The rest of us? Not so much.

    DKos diarist ThOrn analyzes it and comments on Taibbi’s story:

    http://www.dailykos.com/story/2011/04/12/966272/-Taibbi:-Waterfall-TALF-Opportunity:-A-Case-Study-in-Welfare-For-the-Rich

    Here is Matt Taibbi on Waterfall TALF Opportunity, an innocent enough sounding name, but with malignant properties:

    Do not have anything in your mouth when you click the link. The cartoon at the top of the page spells it all out for the reader.

    http://www.dailykos.com/story/2011/04/12/966272/-Taibbi:-Waterfall-TALF-Opportunity:-A-Case-Study-in-Welfare-For-the-Rich

  18. Yep. We have one party far more interested in transferring wealth to the already rich than they are in balancing the budget, and another so terrified of losing power that they won’t raise taxes and think that reducing the budget deficient from its current, absurd levels is enough to “win” the issue while doing nothing to reduce the national debt.

    It’s true, we have zero credibility on this issue.

  19. We spend more on defense than the rest of the world combined. Oh, and by the way, that does NOT include the $170+ billion a year we are pissing away in Iraq and Afghanistan. We pay LESS in taxes than any industrialized country in the world. We also spend less on social services and infrastructure per capita.

    SO there really is only one possible serious answer we can discuss. Cut taxes even more and eliminate all social service spending. Congressman Ryan has a magical pony for us all.

  20. If people do not believe that this is an issue take a look at the gas prices…. It is directly correlated…

    Attempting to overcome national debt
    Gas prices have been a huge money gusler and have taken a toll on people from all places.
    Oil shipments fell Tuesday after China said it would raise interest rates again to help control inflation. Declining gasoline demand and a rare oil shipment from Libya also pulled crude lower later in the day.
    Benchmark West Texas Intermediate agreed for May delivery to give up 13 cents to settle at $108.34 per barrel on the New York Mercantile Exchange. In London, Brent crude added $1.23 to settle at $121.89 per barrel on the ICE Futures exchange.

    http://wcsshield.blogspot.com/2011/04/attempting-to-overcome-national-debt.html

    So spend on war…with out production increases in the US and giving corporate with giving more tax breaks and credits is causing alarm all around the world…China has the ability but is not…Japan a major US investor…well…the are playing shake, rattle and roll right now….

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