Thanks to GuvWurld for pointing out three interesting articles on the US Economy and its continuing deficit, blissful understatement of inflation, and the global impact of a sinking dollar.
In fact a lot of this information comes from those frightfully helpful folks over at the IMF and their monthly report on the state of the worlds economy. For April they devote a half of Chapter 2 of their report to Americas problems caused by its deficit. They really don't mince their words when talking about how bad it is right now:
The budget turnaround from FY2000-04 as a ratio to GDP is
the fastest in the past fifty years and nearly double
the previous worst four-year setback since the
Korean War.
Indeed it was awfully nice of them critique the Bush administrations claims that the deficit will soon be halved by doing basically nothing:
In the five years after 2004 the U.S. Administration
projects that the deficit will fall to
roughly half its FY2004 level (Figure 2.2). This
projected decline is predicated on a series of
somewhat optimistic assumptions about government
operations, including a comeback in revenue buoyancies, no reform of the Alternative
Minimum Tax (AMT)-which is neither indexed
for inflation nor adjusted to compensate for the
recent tax cuts and will affect a growing number
of people - no costs to U.S. taxpayers of peacekeeping
operations in Iraq beyond FY2004, and
a strict containment of non-defense and nonhomeland-
security-related spending in the coming
years. Clearly, if these assumptions did not
materialize, the fiscal outlook would turn out to
be considerably worse.
Shocker. Indeed even in the scenario where the deficit is reduced by 50% by 2009 it still yields a 2.55% reduction in global economic output. With no reduction (which is clearly what the IMF thinks current Bush policies will yield) it would be a 4.5% reduction in global economic output. Basically that means Bush is persuing reverse-mullet economics. A mullet is a style of haircut also know as "business at front, party at the rear". So reverse-mullet economics puts the party at the front and conservative times at the rear. Hence the definition is:
Reverse-mullet economics: party at the Whitehouse, poverty at the back.
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