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.
116 thoughts on “IMF: United States Lacks Credibility on Debt Reduction”
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Hi to every single one, it’s actually a good for me to go to see this site, it contains precious Information.
You know it as well as anyone… we’re in a whole world of trouble… (I think I posted pretty much the same comment on the latest Manning thread, too…)
As is the case with many on this blog, thanks for being one of the good guys…
Thanks for the link to Greenwald’s article. Pvt. Manning comes to mind when I read it.
anon nurse 1, April 14, 2011 at 2:48 pm
Thursday, Apr 14, 2011
The two-tiered justice system: an illustration
By Glenn Greenwald
Of all the topics on which I’ve focused, I’ve likely written most about America’s two-tiered justice system — the way in which political and financial elites now enjoy virtually full-scale legal immunity for even the most egregious lawbreaking, while ordinary Americans, especially the poor and racial and ethnic minorities, are subjected to exactly the opposite treatment: the world’s largest prison state and most merciless justice system. (end excerpt)
… and vigilante “justice” becomes the norm…
I’ll check out Greenwald’s column…
re: ” We don’t have much time left.”
I know that you’re not exaggerating, if what I’m seeing is any indication… Some of what’s going on is the stuff of the past, but it’s much worse…
Bob From District9,
“Congrats, you are the first to make the intended double meaning.”
“Oh, I am used to sarcasm, but you did it so well it looked like you meant it.”
You will fit in quite nicely.
“The only problem the democrats have had is they have not been bold enough.”
And I couldn’t agree more – particularly where Obama is concerned …
“smallguvguy 1, April 13, 2011 at 8:50 pm
The re-election rate in 2010 was 86%, with the lifer still in charge of the committees.”
86% of incumbents, or 86% of those running? The end result was, the republicans took the house and weakened democratic control of the senate, both bad things.
“Bob From District 9
1- Take a breath before you give yourself a heart attack.”
If I don’t straighten out those so badly in error, like you, what is the point of life?
“2- W’s and teamred’s spending topped even LBJ’s great society and Vietnam War spending, so they are as culpable as you think they are. Obama and teamblue have upped the ante in relation to W’s disastrous spending.”
W inherited a balanced budget and thriving economy. Obama inherited a nation on the brink of economic collapse. Big difference. Obama did the only thing he could to stop the fall. Now he has to fight to keep the right from turning the US into a third world country.
The only problem the democrats have had is they have not been bold enough.
3- I lived in Brazil in the mid 80′s so I know what happens when the federales print money like there is no tomorrow. The difference between no money and worthless money is negligible when you can’t feed your family.
“Stamford Liberal 1, April 13, 2011 at 2:06 pm
Bob From District9,
“No, from Ohio congressional district 9.”
Got it – I thought you were referring to the movie, “District 9.”
Congrats, you are the first to make the intended double meaning.
“Sorry, you did it so well it looked like you meant it.”
“No problem – stick around long enough and you’ll see that sometimes, sarcasm rules the day.”
Oh, I am used to sarcasm, but you did it so well it looked like you meant it.
“Bdaman 1, April 13, 2011 at 9:06 am
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.”
First quarter 2010? Nice bit of absurdity.
Obama’s economic policies are succeeding … BUT … they will be limited at best, and may be sunk by republican politics.
Obama’s policies will have limited effect because he was not bold enough. He was weak enough to cave to republicans and make tax cuts 40% of his stimulus. He was weak enough not to stand by the buy American provision.
This time around he was weak enough to let the republicans make policy changes part of the continuing resolution.
That weakness may be his downfall yet.
Glenn Greenwald takes this on in today’s column. You are right that there is wicked stuff going on. It makes me very sad. We have so much going for us in the US and it is all being snuffed out. A nation who will destroy its own people to increase the wealth of a few at the top (or for any reason) is in serious trouble. We don’t have much time left.
“Iceland shows the way with it’s people refusing to pay the debt incurred by the world’s criminal class. So should we. Why aren’t we arresting the perpetrators of the economic crisis and forcing settlements from them? The US does not have a debt crisis, it has an ethical/legal crisis. If we get out of the bloodshed business, prosecute our war and financial criminals, we’ll have plenty of money to rebuild a society that works for our people.” -Jill
Well said, Jill. (And thanks for the common dreams article.)
Something’s gotta give — it’s bad out there… There’s wicked stuff going on in our communities and on our streets… Unbelievable stuff…
We need congressional hearings. The Patriot Act needs to be addressed…, “war and financial criminals” need to be prosecuted (as you rightly say)… and the list goes on…
Iceland shows the way with it’s people refusing to pay the debt incurred by the world’s criminal class. So should we. Why aren’t we arresting the perpetrators of the economic crisis and forcing settlements from them? The US does not have a debt crisis, it has an ethical/legal crisis. If we get out of the bloodshed business, prosecute our war and financial criminals, we’ll have plenty of money to rebuild a society that works for our people. Here’s some news on part of the criminal class who runs our govt.
“by Halah Touryalai
A Senate panel released a damning report accusing the likes of Goldman Sachs of engaging in massive conflicts of interest, contaminating the U.S. financial system with toxic mortgages and undermining public trust in U.S. markets in the months leading up to the financial crisis.
Senator Carl Levin says Goldman execs may have committed perjury in their Senate testimony last year. Just when you thought Washington lawmakers were over that whole financial crisis thing, Senator Carl Levin, D-Mich., and Senator Tom Coburn M.D., R-Okla, blast Wall Street in a 635-page report stemming from a 2-year bipartisan investigation on the key causes of the crisis.
The report comes at a time when much of the feeling from lawmakers in Washington is that Wall Street is being over-regulated by the new Dodd-Frank rules.
The report from the Senate’s Permanent Subcommittee on Investigations however takes an opposite view by citing internal documents and private communications of bank executives, regulators, credit ratings agencies and investors to depict an industry that was rife with conflicts of interest and reckless during the mortgage surge.
Senator Levin said in the release yesterday:
“Using emails, memos and other internal documents, this report tells the inside story of an economic assault that cost millions of Americans their jobs and homes, while wiping out investors, good businesses, and markets,” said Levin. “High risk lending, regulatory failures, inflated credit ratings, and Wall Street firms engaging in massive conflicts of interest, contaminated the U.S. financial system with toxic mortgages and undermined public trust in U.S. markets. Using their own words in documents subpoenaed by the Subcommittee, the report discloses how financial firms deliberately took advantage of their clients and investors, how credit rating agencies assigned AAA ratings to high risk securities, and how regulators sat on their hands instead of reining in the unsafe and unsound practices all around them. Rampant conflicts of interest are the threads that run through every chapter of this sordid story.”
The report takes specific issue with the way Goldman Sachs touted investments to clients on one end but bet against them on the other. A similar accusation against Goldman by the SEC lead to a $550 settlement last year, but Levin and his team don’t think that punishment fits the crime. From the report:
When Goldman Sachs realized the mortgage market was in decline, it took actions to profit from that decline at the expense of its clients. New documents detail how, in 2007, Goldman’s Structured Products Group twice amassed and profited from large net short positions in mortgage related securities. At the same time the firm was betting against the mortgage market as a whole, Goldman assembled and aggressively marketed to its clients poor quality CDOs that it actively bet against by taking large short positions in those transactions.
New documents and information detail how Goldman recommended four CDOs, Hudson, Anderson, Timberwolf, and Abacus, to its clients without fully disclosing key information about those products, Goldman’s own market views, or its adverse economic interests. For example, in Hudson, Goldman told investors that its interests were “aligned” with theirs when, in fact, Goldman held 100% of the short side of the CDO and had adverse interests to the investors, and described Hudson’s assets were “sourced from the Street,” when in fact, Goldman had selected and priced the assets without any third party involvement.
New documents also reveal that, at one point in May 2007, Goldman Sachs unsuccessfully tried to execute a “short squeeze” in the mortgage market so that Goldman could scoop up short positions at artificially depressed prices and profit as the mortgage market declined.
This isn’t the first time Levin is gunning for Goldman. Back in April 2010, the Senator had a memorable back-and-forth with a Goldman executive during a testimony where the two discussed a “shitty deal” the firm was selling to clients.” (find at common dreams)
Thanks for that. First good news of the morning…
http://krugman.blogs.nytimes.com/2011/04/13/the-budget-speech/?smid=tw-NytimesKrugman&seid=auto Krugman says he can live with the Obama budget. The speech was much better than exoected.
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