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Economic Zealots Endanger Global Economy; IMF Hypocrites Urge Permanent US Can Kicking, Fiscal Stimulus, and Enormous Deficits
Courtesy of Mish.
One thing sure to raise my ire is a group of mindless hypocrites who say one thing and do another, while pretending they have a clue. In this case I am talking about the IMF.
As part of the Troika, the IMF helped ruin Greece. The country is now in a never ending depression with the youth jobless rate at 58 percent, and overall unemployment at 25.4%. Every step of the way the IMF demanded more austerity measures, as did the ECB, EU, and Germany.
And every step of the way Greece spiraled further and further behind. It’s not that austerity was unneeded, rather austerity could only really work in conjunction with a eurozone exit and work rule reform.
The IMF has lowered economic forecasts on Greece too many times to count. What was a €40 billion problem several years ago when I urged Greece to default is now a €240 billion problem.
Yes, the Troika threw €200 billion at a €40 billion problem. The reason is stubborn arrogance coupled with what amounts to religious fanaticism to save the euro project no matter who is destroyed in the process.
Eventually there is going to be a €240 billion haircut when Greece comes to its senses, tells the Troika to go to hell, and defaults on the entire mess.
IMF Hypocrites Urge Permanent US Can Kicking, Fiscal Stimulus, Enormous Deficits
While preaching round after round of austerity for Greece, Spain, Portugal, and Ireland, austerity is the last thing the IMF wants for the US.
Please consider IMF urges permanent fix to U.S. ‘fiscal cliff’
The International Monetary Fund on Thursday urged the United States to quickly reach an agreement on a permanent fix to avoid automatic tax hikes and spending cuts early next year, saying a stop-gap solution could be harmful to the global economy.
In a report prepared for the Group of 20 finance ministers’ meeting in Mexico on November 4-5 and published on Thursday, the IMF warned that the euro zone crisis and the threat of a political impasse in Washington over the looming fiscal cliff posed the biggest risks to the world economy.
The IMF has estimated that the tax increases and spending cuts amount to $700 billion in 2013. Unless avoided, this could contract U.S. gross domestic product by around 4.5 percent.
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2012-11-09 13:20:38
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