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Politics : THE VAST RIGHT WING CONSPIRACY -- Ignore unavailable to you. Want to Upgrade?

To: calgal who wrote (5317)	1/7/2004 11:50:47 PM
From: calgal	Respond to of 6358

IMF Researchers: US Budget Gaps Endanger Global Economy Wed Jan 7, 5:21 PM ET By Joseph Rebello, Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--Economists at the International Monetary Fund (news - web sites) on Wednesday expressed alarm at growing U.S. budget deficits, saying continued deficits could hurt the global economy by roiling currency markets and driving up interest rates. Related Quotes DJIA NASDAQ ^SPC 10529.03 2077.68 1126.33 -9.63 +20.31 +2.66 delayed 20 mins - disclaimer Quote Data provided by Reuters Missed Tech Tuesday? Everyone uses e-mail -- but do you use it well? Plus, how to avoid e-mail gaffes and give your e-mail more oomph. In a report on U.S. budget outlook, IMF researchers described the state of government finances as "perilous" in the long run and urged Congress and the White House to take steps to quickly rein in the deficits. Although federal tax cuts and spending increases since 2001 bolstered the global economy in the short run, the report said "large U.S. fiscal deficits also pose significant risks for the rest of the world." A key risk is that the recent slide of the U.S. dollar against other major currencies could become "disorderly," the researchers said. The dollar has declined sharply since early 2002 against both the European common currency and the Japanese yen, complicating the task of European and Japanese monetary policymakers, said Charles Collyns, who heads the IMF team that monitors the U.S. economy. "We feel there is a substantial risk that the foreign investors' appetite for U.S. assets, and in particular U.S. government assets, will over time diminish," Collyns said in a news conference. "We think to some degree over the past year this has occurred, and this is one of the reasons why there has been weakness in the U.S. dollar." So far, he said, the decline hasn't jeopardized the economic recoveries in Europe and Japan, but the danger to the global economy could grow if the U.S. budget deficits aren't shrunk. The White House has said it expects the budget deficit to expand to a record $ 475 billion in fiscal 2004, exceeding 4% of the gross domestic product. U.S. Treasury Secretary John Snow on Wednesday described that level as "entirely manageable," and said the Bush administration expects the deficit to shrink to 2% of GDP (news - web sites) within five years. But the IMF researchers said that won't be enough to address the government's long-term fiscal problems - including financing the Social Security (news - web sites) and Medicare programs over the next 75 years. In their report, they said the government faces a $47 trillion shortfall in its ability to pay for those and all other long-term obligations. Closing that gap would require "an immediate and permanent" federal tax increase of 60% or a 50% cut in Social Security and Medicare benefits. The dollar's recent decline, the researchers said, suggests that foreign investors are starting to worry about the U.S. government's ability to resolve its long-term fiscal problems. "The United States is on course to increase its net external liabilities to around 40% of GDP within the next few years - an unprecedented level of external debt for a large industrial country," they said in the report. "This trend is likely to continue to put pressure on the U.S. dollar." The IMF report said the ratio of U.S. public debt to GDP is expected to increase by 15 percentage points over the next decade. If that occurred, global interest rates, adjusted for inflation, would rise by an average of 0.5 to 1 percentage point. "Higher borrowing costs abroad would mean that adverse effects of U.S. fiscal deficits would spill over into global investment and output," the report said. Congress and the White House can avert those dangers by acting immediately to balance the budgets, the researchers estimated. Allowing the recent tax cuts to expire by 2013 would reduce the budget shortfall by nearly half. The researchers also said Congress should consider a tax on energy consumption, arguing that it would "help meet the administration's environmental objectives while also providing substantial support for fiscal consolidation." Such tax increases, they calculated, would have a minimal effect on U.S. economic growth.

To: calgal who wrote (5317)	1/8/2004 12:55:06 AM
From: calgal	Read Replies (1) \| Respond to of 6358

Trifecta of losers By David Limbaugh It's inevitable. 2004 will be a particularly interesting year in politics — on both sides of the political aisle, but mostly on the Democratic side. As of now, it appears the three most interesting players will be President Bush, obviously, Howard Dean and Hillary Clinton. Once Mr. Dean sews up the nomination, will he immediately veer to the center? How much further left will President Bush go on domestic policy? What will Hillary do, and what will she say, as she calculatingly positions herself for the 2008 run? Think about it: September 11, 2001, caused a paradigm shift in presidential politics. For the foreseeable future, the driving issue will likely not be the economy, but national security and foreign policy — to the substantial disadvantage of the Democrats. As congenital doves who are soft on national defense, the Democrats don't inspire confidence in these areas. But Republicans, and specifically George Bush, do. The public feels more secure under the Republicans' leadership. Compounding the Democrats' problem is that presidents are more relevant during wartime — and the public knows it. The policies and actions of presidents as commanders in chief have a major and potentially immediate impact on military and foreign affairs. On the other hand, while a president's domestic policies can greatly affect the economy — as with Mr. Bush's tax cuts — they are much less frequent, and their results are generally less immediate. (How often during a presidential term do you have a major tax bill?) And by the way, these aren't just problems the Democratic Party has with the antiwar Howard Dean, though they are worse if he's their nominee. It has been almost comical to watch the other eight candidates criticizing Dr. Dean for his antiwar stances when they barely have more credibility on national defense. Just think of them as Dean light. None of them holds a candle to Mr. Bush here. None of them is enthusiastic about prosecuting this war; they reserve their excitement for such specious concerns as whether Mr. Bush is involving enough nations in his decisions and whether he exaggerated reports of Iraqi weapons of mass destruction. It's as if the other Democratic presidential contenders are saying, "Don't vote for Dean because he is utterly irresponsible on national security issues. Vote for us; we are just marginally irresponsible." (Do you think one single international terrorist is rooting for Mr. Bush in 2004?) But it will be interesting to see how much more strident Mr. Dean's desperate opponents will become in trying to derail him. And things will get even more fascinating once the conventions are over and the general election campaigning begins. It will then be time for Howard Dean to say, "Now what?" "What do I do with all my Bush-haters? How do I continue to string them along as I endeavor to slither back into the land of rationality to position myself for at least, say, 40 percent of the popular vote?" Not to worry. Deaniacs have nowhere else to go. So Mr. Dean can proceed to prove he's the centrist that his loopy supporters have been claiming he is all along. But how is he going to prove that? And how much is it going to help him if he does, especially considering President Bush — regrettably, in my view — has veered center/left himself on so many domestic issues: education, prescription drugs, campaign finance reform, etc.? Mr. Dean probably will ignore the substance of the domestic issues, too, and focus on the negative, trying to work on the hate angle here as well, through class warfare and portraying Mr. Bush as a blue blood, cozy with big corporate corruption. (Can you imagine how bonkers these Bush-haters would be if a true, domestic-policy conservative were in office right now?) Nevertheless, such phony populism will satisfy Mr. Dean's carnivorous Bush-haters and may have some chance of capturing swing voters. While I never take elections for granted and realize any number of things can happen between now and November, I truly think this will remain George Bush's election to lose. And as this year unfolds, we should keep a sharp eye on Hillary Clinton. She is focused on her 2008 presidential bid. She's savvy enough to know war issues will dominate through 2004 and probably 2008. Consequently, she has already been positioning herself as more hawkish and less military-loathing. But the shrewd Hillary also will have the advantage of observing and learning from Mr. Dean's (or whichever Democratic nominee's) campaign experiments to see what plays well. Yes, this will be an intensely interesting year. David Limbaugh is a nationally syndicated columnist. URL:http://www.washingtontimes.com/commentary/20040107-084242-5446r.htm