published Sunday, June 26th, 2011

Dire warning on our debt

Looking at our nation’s weak economy, high unemployment and eye-popping $14.3 trillion debt, President Barack Obama and a majority of the members of Congress should easily recognize the need to slash the dangerous levels of spending that have prevailed in Washington for much too long.

But if those negative economic indicators alone cannot persuade them to start making some commonsense budget cuts, perhaps a serious warning from the International Monetary Fund will help them make up their minds.

The IMF, a global lender that is based in Washington, has reduced its forecast of U.S. economic growth for this year and for 2012. The IMF had said earlier that our economy would expand by 2.8 percent this year and 2.9 percent in 2012 — which are not exactly “strong” growth figures to begin with.

But now the IMF predicts that our country will see only about 2.5 percent growth this year and 2.7 percent growth next year.

Why the downgrade?

The IMF says the United States and several other countries are taking enormous risks by maintaining disastrously high levels of debt year after year. Political wrangling over the debt in the United States is making the problem worse and delaying any possible solution, the IMF declared.

“You cannot afford to have a world economy where these important decisions are postponed, because you’re really playing with fire,” Jose Vinals, director of the IMF’s monetary and capital markets department, recently told Reuters news agency.

Vinals added, “We have now entered very clearly into a new phase of the [global] crisis, which is, I would say, the political phase of the crisis.”

At issue in the United States is the attempt by Democrats and the president to raise our non-limiting, so-called “debt limit” beyond its current $14.3 trillion “ceiling.” Republicans have properly said they will not agree to an increase in the debt limit unless it is accompanied by major cuts in federal spending, but Democrats propose spending cuts that are far too small.

Considering the size of the national debt, can anyone rationally argue that federal spending doesn’t need to be reduced significantly — and soon?

Do we really think that continuing on our present course will somehow magically begin to yield different results?

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nucanuck said...

Repealing the Bush tax cuts would be a good place to start. Next comes heavy cuts in defense and security spending which presently exceeds that of the rest of the world combined...sickenly excessive. Social Security adjustments must be made to keep the system on solid footing. Medicare should be made universal with pay-ins, cost controls, and taxation to give all Americans access to basic health care. Additional levels of coverage should be made available to those who choose to pay more.

There are many more cuts in spending required, some as obvious eliminating subsidies across the board, but nothing more important than maintaining a rational level of support for the sick and elderly.

National survival will never be achieved by throwing the weakest under the bus.

June 26, 2011 at 2:15 a.m.
EaTn said...

The economy is like the choices of those in a boat in a storm that developed a major leak: do they bail water, grab a flotation device or try to plug the gaping hole? Either way some will get wet and some may drown. Do we want to give the final decision to those who have already grabbed the life vests?

June 26, 2011 at 6:57 a.m.
Livn4life said...

It's all the Republicans. If we just go with the Democrats' plan we will be fine(NOT).

June 26, 2011 at 5:42 p.m.
ceeweed said...

Lets reform the tax code so us peons can just pay our taxes directly to the rich. Oh yeah, there are not enough loopholes for corporations. And while we are at it, lets allow banks to make loans without any money on reserve, just think of all the loans they can make. Of course we will have to make it risk free for the bankers and pick up the tab for any losses they may incur. That ought to get things on the right track. We could probably dissolve our Armed Forces and just use private contractors to fight our wars, they have already proven themselves to be honest stewards of our billions in Iraq and Afghanistan. Wow! I really think I'm on to something!

June 26, 2011 at 10:20 p.m.
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