{"id":88977,"date":"2024-06-28T15:00:31","date_gmt":"2024-06-28T23:00:31","guid":{"rendered":"https:\/\/www.cogwriter.com\/news\/?p=88977"},"modified":"2024-06-28T06:09:59","modified_gmt":"2024-06-28T14:09:59","slug":"voa-imf-says-us-needs-to-tackle-debt-usa-today-ballooning-u-s-budget-deficit-is-killing-the-american-dream-cogwriter-debt-will-be-part-of-the-usas-worst-nightmare","status":"publish","type":"post","link":"https:\/\/www.cogwriter.com\/news\/prophecy\/voa-imf-says-us-needs-to-tackle-debt-usa-today-ballooning-u-s-budget-deficit-is-killing-the-american-dream-cogwriter-debt-will-be-part-of-the-usas-worst-nightmare\/","title":{"rendered":"VOA: IMF says US needs to tackle debt; USA Today: Ballooning U.S. budget deficit is killing the American dream; COGwriter: Debt will be part of the USA’s worst nightmare"},"content":{"rendered":"

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COGwriter<\/a><\/p>\n

Voice of America<\/em> reported:<\/p>\n

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IMF says US needs to tackle debt despite robust growth<\/h2>\n

June 27, 2024<\/p>\n

The International Monetary Fund on Thursday called on the U.S. to raise taxes to curb rising debt levels while applauding “robust, dynamic” growth in the world’s largest economy and progress toward bringing inflation under control.<\/p>\n

The IMF said in a closing statement for its “Article IV” review of U.S. economic policies that high deficits and debt “create a growing risk to the U.S. and global economy, potentially feeding into higher fiscal financing costs and a growing risk to the smooth rollover of maturing obligations.”<\/p>\n

The IMF’s statement slightly revised down its 2024 U.S. GDP growth forecast to 2.6% from the 2.7% forecast in the global lender’s World Economic Outlook in April. …<\/p>\n

the IMF chided Washington for rising deficits that, if continued, would bring the U.S. debt-to-GDP ratio to a concerning level of 140% by the end of the decade. The IMF measure includes Social Security pension and Medicare health care obligations.<\/p>\n

“Such high deficits and debt create a growing risk to the U.S. and global economy, potentially feeding into higher fiscal financing costs and a growing risk to the smooth rollover of maturing obligations,” the Fund said.<\/p>\n

The fund said the U.S. also should reform entitlement programs, cuts that Biden and Republican rival Donald Trump have both vowed not to pursue, and raise the threshold for eligibility for the Earned Income Tax Credit for workers without children.<\/p>\n

Georgieva said the fund was trying to present a policy path for the U.S. “that in our view would serve the economy and its people well,” as it would for any IMF member country.<\/p>\n

With the U.S. economy strong, it was a “good time” for the U.S. to consolidate its fiscal position, she said, adding: “It is in good times where you can do more to prepare yourself for risks in the future.” https:\/\/www.voanews.com\/a\/imf-says-us-needs-to-tackle-debt-despite-robust-growth-\/7676503.html<\/a><\/p><\/blockquote>\n

Yes, deficits should be cut and savings built up when the economy is growing–yet the USA has not done that.<\/p>\n

This will cause major problems.<\/p>\n

USA Today<\/em> posted the following:<\/p>\n

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Ballooning U.S. budget deficit is killing the American dream<\/h2>\n<\/blockquote>\n

June 27, 2024
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The government\u2019s deficit problem is creating an income problem for Americans, economists warn.<\/p>\n

Last week, the Congressional Budget Office raised its estimate for the government deficit<\/a> this year by a whopping 27%, or $408 billion over its February forecast, to $1.9 trillion.<\/p>\n

Paying for that debt can divert money away from private investment, which in turn may dampen wage growth, economists say.<\/p>\n

\u201cThe exploding debt<\/a> could cause as much as a 10% reduction in wage income within 30 years,\u201d said Kent Smetters, a University of Pennsylvania Wharton School professor and faculty director of the Penn Wharton Budget Model. ,,,<\/p>\n

To pay for increasing spending<\/a>, the government issues debt like Treasuries and bonds with higher interest rates to attract investors. When investors put money into government debt, they do so at the expense of more productive private investments \u2013 what economists refer to as the “crowding out effect.” …<\/p>\n

CBO expects federal debt held by the public to rise from 99% of gross domestic product in 2024 to 122% in 2034, surpassing the peak of 106% reached in 1946, immediately following World War II. https:\/\/www.usatoday.com\/story\/money\/personalfinance\/2024\/06\/27\/us-budget-deficit-cuts-incomes\/74211526007\/<\/a><\/p>\n<\/blockquote>\n

Well, that USA Today article is overly optimistic. Debt will be part of the USA’s worst nightmare.<\/p>\n

Consider the following from last fall:<\/p>\n

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The United States Deficit Road To Ruin<\/h2>\n

According to the U.S. Treasury, year-end data from September 2023 show that the deficit for the full year 2023 was $1.7 trillion, $320 billion higher than the prior year\u2019s deficit. As a percentage of GDP, the deficit was 6.3%, an increase from 5.4% in FY 2022. This means that the United States will likely post the worst GDP growth excluding debt increases since 1929<\/strong> …<\/p>\n

The United States government is unable to spend less than 22.8% of GDP, and no tax revenue measure can eliminate the deficit.<\/strong> Those who think that taxing the rich would eliminate the deficit should ask how the government would collect $1.7 trillion in additional taxes per year and every year, no matter what the growth of the economy is.<\/p>\n

With $33.6 trillion of public debt and the administration\u2019s own estimate of the accumulated deficit for 2023\u20132022, public debt is going to soar by $14 trillion. No tax measure can eliminate that problem.<\/strong><\/p>\n

Deficits are always a spending problem. <\/strong>10\/23\/23 https:\/\/www.zerohedge.com\/political\/united-states-deficit-road-ruin<\/a><\/p>\n

The yield on the benchmark 10-year Treasury note, a key barometer for mortgage rates, auto loans and student debt, rose back above 5% on Monday. …<\/p>\n

Most of the recent jump in Treasury yields is due to a so-called term premium, said Andrew Hunter, deputy chief U.S. economist at Capital Economics.<\/p>\n

Basically, investors are demanding a higher return to lend their money to the U.S. government \u2014 in this case, for 10 years. One reason: Investors seem skittish about rising U.S. government debt, Hunter said. Generally, investors demand a higher return if they perceive a greater risk of the government\u2019s inability to pay back debt in the future.<\/p>\n

The rapid rise<\/a> in Treasury yields may \u201caccelerate an already weakening economic picture that is masked by higher rates,\u201d said Tony Dwyer, chief market strategist Canaccord Genuity Group, in a Monday note. https:\/\/www.cnbc.com\/2023\/10\/23\/the-10-year-treasury-tops-5percent-again-heres-what-that-means-for-you.html<\/a><\/p><\/blockquote>\n

The USA is the most indebted nation in the history of humanity. Rising interest rates increase the debt and look to one day result in a debt spiral that will be a factor in the elimination of the USA!<\/p>\n

This increasing of debt cannot go on forever.<\/p>\n

Even when he was President of the United States, Barack Obama said the levels of debt his Administration oversaw was “unsustainable,” yet the debt keeps going up.<\/p>\n

Notice the following levels of official US debt:<\/p>\n