Well, I guess we can listen to wingnuts, living in a sort of "faith-based", fantasyland version of reality, tell us that everything is going just great and "you're doing a heck of job, Bushie", or we might want to listen to economic experts who actually know something about the world economy, like the guys at the IMF. The dollar has been inflated and is now in trouble. A weak dollar plus the huge and ever growing trade deficit plus Bush's conversation of a budget surplus under Clinton to a record budget deficit and spiraling-out-of-control National Debt equals serious, even possibly disasterous, financial consequences for most Americans in the next few years.
US deficit may pose 'global risk'
BBC News - World Edition
Wednesday, 7 January, 2004
http://news.bbc.co.uk/2/hi/business/3377795.stm
Excessive fiscal deficits in the US could hurt the long-term sustainability of the American and global economies, the International Monetary Fund warned.
Recession, tax cuts and high spending for the war on terrorism have resulted in large deficits, the IMF said.
That could place upward pressure on interest rates, and pose risks for the US economy and rest of the world.
IMF Deputy director Charles Collyns, said
international investors could also lose confidence in the dollar.
That, he said, could force them to
consider investing elsewhere.
'Adverse consequences'
Noting the dollar's recent slide against the euro, UK pound, and yen, the IMF said an unrestrained drop could have serious consequences at home and abroad.
The IMF report said the dollar has been affected by the
mushrooming US current account and budget deficits.
"This trend (of deficits) is likely to continue to put pressure on the US dollar, particularly because the current account deficit increasingly reflects low saving rather than high investment.
"Although the dollar's adjustment could occur gradually over an extended period, the possible global risks of a disorderly exchange rate adjustment, especially to financial markets, cannot be ignored," the IMF said.
"Episodes of rapid dollar adjustments failed to inflict significant damage in the past, but with US net external debt at record levels, an abrupt weakening of investor sentiments vis-a-vis the dollar could possibly lead to adverse consequences both domestically and abroad."
It also said the deficits could deter private investment within the US, impede long-term productivity growth, and endanger the vitality of social security and Medicare programs.
copyright: BBC
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