Monday, May 17, 2010


If you haven't gotten to Greece, worry not, Greece is coming to us.  While we don't have the Parthenon or really old stuff like democracy and statues or rational thought like Plato or Aristotle, we do have debt as the following article describes.

Breaking from (May 17, 2010, Monday afternoon.)

IMF Warns U.S. Debt Nears 100 Percent of GDP, Greece In Better Shape

By Frank McGuire

The United States’ national debt will soon reach 100 percent of gross domestic product, the International Monetary Fund predicts in a new report.

The sharp rise in U.S. debt started in 2006 and by 2015, the IMF suggests, debt could reach more than 100 percent of GDP.

At the end of first quarter of 2010, the gross debt was 87.3 percent of GDP, of which about 56 percent was held by the public, and about 44 percent was intragovernmental, U.S. officials have said.

Special: If the Euro and the Dollar Collapse, What Happens to Your Wealth?

The IMF predicts that the U.S. would need to reduce its structural deficit by the equivalent of 12 percent of GDP, a much larger portion than any other country analyzed except Japan.

Greece, in the midst of a financial crisis, needs to reduce its structural deficit by just 9 percent of GDP, according to the IMF's analysis.

The IMF also encouraged rich countries including the U.K. to eliminate value- added-tax loopholes to help cut their budget deficits, the Financial Times reported.

The IMF said the United Kingdom could raise an amount equivalent to 3.3 percent of GDP, or a third of its estimated deficit, by removing exemptions and improving collection of the sales tax, according to Bloomberg. As the global economy recovers, governments’ fiscal balances are on average continuing to deteriorate, the IMF said.

Meanwhile, the IMF also waded into the debate over healthcare reform, questioning the CBO's analysis that healthcare reform would reduce the U.S. deficit, according to

"There are some risks to the CBO estimates, however, including that the substantial decrease in Medicare payment rates to healthcare providers may prove difficult to implement," the report reads.

President Barack Obama has established a fiscal commission to make recommendations on addressing the nation's fiscal woes. [blogger's note: Ha, ha, ha. A fiscal commission is a cop-out from a pathetically weak leader.]

No comments: