Dire warning on our debt

Dire warning on our debt

June 26th, 2011 in Opinion Free Press

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?