*Ø* Blogmanac | The insanity rages on!

There are two sure signs of insanity. One is doing
something the same way over and over expecting
a different result. The other is saying "I'm all right,
the WORLD'S all wrong!" --v


US Rejects IMF Warning that Debts Could Affect Global Economy
By Barry Wood, Washington
Voiceof AmericaNews
08 Jan 2004, 20:52 UTC


The U.S. Treasury Department Thursday rejected a warning from the International Monetary Fund that the huge American trade and budget deficits could pose a risk to the global economy.

A Treasury spokesman dismisses the IMF report as breathless hyperbole. The IMF says the $500 billion U.S. fiscal deficit combined with a $135 billion trade deficit could undermine the world recovery by pushing the dollar lower and interest rates higher.

Treasury Secretary John Snow acknowledged Wednesday that the growing fiscal deficit is a problem. But he promised to cut the deficit by half within five years. Mr. Snow outlined several reasons why the deficit is higher than anticipated.

"The war in Iraq: It is a one-time thing. {Yep. A one-time, 20+ year, $300Billion+
"thing." -v} But it had to be dealt with. Afghanistan had to be dealt with," he said. "But they created a bulge in [government] spending. And then we had the tax reductions."

The IMF has for a long time been worried about the burgeoning U.S. trade deficit. Its concern about the U.S. fiscal deficit is more recent, as the United States went from having a budget surplus in 2000 to having a very large deficit just three years later.

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