The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and debt-ridden European countries that they are “playing with fire” unless they take immediate steps to reduce their budget deficits.
The IMF, in its regular assessment of global economic prospects, said bigger threats to growth had emerged since its previous report in April, citing the euro zone debt crisis and signs of overheating in emerging market economies…
Gee, ya think? You mean that massive money printing to give China 10% “growth” and gigantic debt in the United States and Europe can cause a problem? Who would have thunk it?
Well, I did. So did anyone observing this who isn’t some sort of mindless drone or Ruling Class scam artist. There is nothing at all surprising, at this late a date, in the fact that fake money and high debt cause problems…one way or the other the debt has to come down. And it can only come down by spending cuts. Don’t fall for the siren song of higher taxes and expectations of higher growth – that is a dead end. The higher taxes will crush any higher growth you can expect. Only cuts will do it.
Our fundamental problem in this is that we’ve got President Obama. As long as he is President we simply will not get the policies necessary to fix the problem. Its not a matter of him being hostile to good policies – he lacks the knowledge and experience to even realize that there are different policies to be pursued. If you tried to bring up the things we need to do you’d probably get a blank stare…it is outside his experience; he’ll have no frame of reference to judge the policies.
So, just hang one. Get out of debt, save your money…hunker down and hope it doesn’t get too bad. If in January of 2013 we’ve got a new President and a GOP Congress, then we can set to work to fix things…until then we can only hope to hold the line.