IMF Demands that the World Be Shock Doctrined.....OR ELSE !!!

[marmar]

IMF Says Rising Public Debt Risk ‘Cannot Be Ignored’ (Update1)
By Sandrine Rastello


May 14 (Bloomberg) -- The International Monetary Fund urged governments to cut public debt to prevent higher interest rates and slower economic growth, saying the fiscal crisis in Europe shows such risk “cannot be ignored.”

Debt in developed economies will expand to about 110 percent of gross domestic product by 2015, from 73 percent in 2007, the IMF said in a fiscal review released today. For the Group of Seven countries, the ratio is the highest since World War II, it said.

“As economic conditions improve, the attention of policy makers should now turn to ensuring that doubts about fiscal solvency do not become the cause of a new loss of confidence: recent developments in Europe have clearly indicated that this risk cannot be ignored,” the IMF said. “Major fiscal consolidation will be needed over the years ahead.”

Investors’ concerns that Europe’s fiscal crisis will hurt global growth resurfaced today, even after policy makers in the region earlier this week unveiled an unprecedented loan package worth almost $1 trillion. U.S., Asian and European stocks fell, oil retreated for a fourth day and the euro slid to below $1.24, a level not seen since November 2008.

If developed economies choose only to stabilize debt at its 2015 level, long-term interest rates may climb by 2 percentage points and potential growth may be 0.5 percentage point lower annually, the IMF predicted. That, in turn, would raise borrowing costs in emerging countries, it said. ...........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601087&sid=a89PYcKILsM8&pos=5

[sabrina 1]

1. 'Public Debt'!

People should run from the IMF, as many countries who suffered under their policies for decades either have done or are trying to do in South America. They destroyed the third world and have now moved to Europe, next stop U.S.A. with the help of the current administration it seems.

Let's talk about the private sector's debt to the working class. The money they've stolen and are not being prosecuted for. I'll pay attention when someone starts talking about finding all the money they stole and returning it to its rightful owners.

[Statistical]

2. Can't keep borrowing forever.

I mean 110% of GDP in debt. Ouch.

If you had 110% of your annual salary in credit card debt you would be in trouble too.
Wouldn't be shocking if a debt counselor said you need to start spending less on credit card.

[marmar]

3. Spain's debt-to-GDP is 36 %, well below the Eurozone average, yet they seem to be the next target...

Something reeks.

[madrchsod]

7. i think you are smelling goldman sachs and the imf.....

[truedelphi]

13. And the smell sure ain't ohne of perfume. n/t

[Statistical]

8. Spain public debt was 36% in 2007.

Three years of rising spending, recession, and massive drop in taxation has radically changed that situation.

National debt now stands at over 50% of GDP (42% rise in nominal amount 3 years).

https://www.cia.gov/library/publications/the-world-factbook/fields/2186.html

Worse is that govt have huge intertias. It is unlikely Spain will do a 180 and go from large 8.5% of GDP deficit to massive surplus overnight so national debt as % of GDP is expected to rise for years to come.

[glitch]

17. Punishment for voting in Socialists. nt

[Arctic Dave]

4. I would assume that anyone financing a home would have

more then 100% of their annual salary in debt.

[Statistical]

6. True but if the same person then kept borrowing every single year for decades

piling debt on top of debt on top of debt and then taking out new debt to pay out debt (i.e. using cash advance on credit card to make payment on mortgage) I would say that person has a problem.

Deficits aren't generally speaking bad. Like you said most people wouldn't own a home without deficits. However prolonged deficits that EXPAND during good years (economic booms) set you up for failure in a recession when demand for spending rises AND revenue (taxation falls).

Not everyone who has a mortgage has a foreclosure but every foreclosure starts with a mortgage. :)

[Hannah Bell]

9. uh, world-wide recession in case you hadn't noticed. spain = about 20% unemployment.

& a good deal of this debt was racked up in the wake of the bankster breakdown.

and the "rescue" is going to the banksters too.

nice con. gov't gives them free money which they loan to governments at interest -- & demand cuts in public spending to pay the freight.

= HIGHER UNEMPLOYMENT, MORE BUSINESS FAILURES, MORE BANKRUPTCIES & FORECLOSURES.

But as long as the bloodsuckers make their 10%.

[Statistical]

10. A lot of debt was racked up a long time before the "banksters".

Why don't you help Spain out and buy some of their bonds?

Interest rate is simply the price of money.
Spain has a lot of supply and their isn't as much demand (people tend to not enjoying defaults).

Thus rate rise.

It is the proverbial rock and hard place which is WHY GOVT SHOULD RUN SURPLUSES DURING ECONOMIC BOOMS to pay down debt.

Otherwise when you need it you are already so indebted you are essentially stuck.
Need to keep spending up to get out recession, but revenue is down thus you need to borrow but debt is reaching critical level so interest rates rise. Rising interest rates means more of budget is going towards interest so you need to borrow even more.

Downward spiral.

Debt should be used responsibly:
Economic boom = run surpluses and lower debt to gdp ratio.
Crisis = run deficit and raise debt to gdp ratio.

There is no free lunch. Over last decade govt have gotten addicted to spending massive amounts of money even in economic expansions.

You can't keep borrowing unlimited amounts of money forever.

[Hannah Bell]

11. spain's was 36% in 2007. bush racked up a lot of the current us debt in his last term.

in fact, you can keep borrowing money forever, depending on who you borrow from, & under what conditions.

us basically has done just that for over 100 years.

your debt panic/grind the workers stuff = bullshit.

most of debt racked up by the paid operatives of the financial class, for the financiers, of the financiers, by the financiers.

default. screw the bastards. governments gave them free money which they loan back to governments at interest. SCAM, SCAM, SCAM.


GO PEDDLE YOUR "PERSONAL RESPONSIBILITY" BULLSHIT TO BP.

[Statistical]

12. Two points

1) 100 years isn't forever.
2) US borrowing has massively accelerated in last 30 years. Including the first 80 relatively steady years of borrowing the the last 2 decades is silly.



Other than the WWII spike (which was a clearly defined spending goal followed by a rapid tax surplus used to pay down the debt) US debt to GDP has remained below 50% for most of our countries history.

That changed in 1985 and we have been on an upward trajectory ever since.


Only 4 differences between US & Greece
1) Much stronger economy
2) Ability to inflate and thus reduce "real" amount of debt
3) Much lower borrowing/carrying costs. Nobody can borrow money at rates we can.
4) Relatively low taxes that "can" (doesn't mean we will because of teabaggers) to raise revenue.

Other than that we are on the same path. We simply got a decade (or until next major crisis) because of our financial advantages.

[Hannah Bell]

20. so what? it's accelerated because of the complicity of pols w/ finance.

your answer is to reward the conspirators & punish the marks.

mine is to screw the conspirators to the wall.

reducing government spending during a recession = MORE UNEMPLOYMENT, do you not get that fine point?

[JDPriestly]

22. Remember how Greenspan warned against having too much in reserves

after Clinton balanced the budget. The same people who run the IMF, people like Greenspan, argued against our maintaining reserves at the crucial time.

If we got out of Iraq and closed a number of superfluous military bases around the world, we could balance our budget easily and not adjust a thing in Social Security.

Placing democratically elected governments in financial jeopardy is a strategy, and it is working well for the Wall Streeters and those who want democracy replaced by a sort of financial aristocracy, sold to the ordinary folks of course as a government owing its existence to God.

[JDPriestly]

16. The IMF moves too quickly to control debt. In so doing, they

slow growth that is needed to pay off debts. It is premature to press countries like that.

The time will come to press about debt. This is not it. Too many ordinary people still don't have jobs and can't contribute no matter how much they want to help cut debt.

Cutting things like funding for child care for low income families is counterproductive. But we are getting to that desperate point in California. I would like to see any creditor try to seize assets for debt in any state in the United States. They can cut off credit. But then they really already have. I say that because the banks have cut off debt for ordinary business- and homeowners and in that way reduced the tax revenue in states like California.

The IMF works from assumptions that are incorrect about how economies and people work. The IMF protects wealth not democracies.

The IMF does not value freedom or representative government. It just values the wealth of the wealthy.

It should be abolished.

[Statistical]

18. The IMF doesn't force anyone to use them for assistance.

Greece chose to use IMF money BECAUSE they couldn't make debt payment coming due in 2011 and that would have resulted in general insolvency.

I do agree govt spending shouldn't be reduced in recession however the flip side of that is that govt spending SHOULD be reduced in economic booms however our Congress and govt around the world are addicted to money and when more revenue comes in (like in boom period) they simply spend even more.

That is simply not sustainable.

[JDPriestly]

21. Look, the heavy hitters on Wall Street and the City in the UK

have found a way to bring down sectors of the market one by one. Each time they start a rout on stocks or debt or something everybody panics and starts selling. The heavy hitters make a killing and walk away laughing.

Of course, debt is out of control in western democracies. That's because we allowed our tax bases -- our jobs -- to be outsourced and exported. In lieu of jobs that paid incomes high enough to keep a reasonable amount of government going, we got cheap products.

Once Wall Street and the City and their wealthy investors from around the world, think every monarchy, every third world country in which a power elite exploits its workers and its resources for personal gain, have finished destroying the European economies, they will turn to the U.S. and Canada. It's just a matter of time.

This is an attack on democracy. This is an attack on our freedom. It's time we all recognize it for what it is.

[MisterP]

5. as in the 80s we're told about debt and "irresponsible" government expenditure,

without beign told about the lenders and their tightening of policies, from Citi to the World Bank

[truedelphi]

14. Thank you for posting, marmar. n;/t

[xchrom]

15. My god that quote from the IMF sounds positively

Greenspanian. Shudder.

[glitch]

19. IMFing the world.

pronounced the way it's spelled.