A strange twist of economic news occurred a few days ago—the International Monetary Fund, an organization that earned the unofficial title of global austerity spokesperson given its track record, more or less called the United States’ current budget austerity sequestration policies a dumb idea!
From IMF Managing Director, Christine Lagarde:
“The $85 billion in spending cuts this year — the first installment of nearly $1.2 trillion in reductions over the next decade — were too much for the still-recovering economy.
Because it appears Congress won’t repeal the cuts, the IMF lowered its 2014 growth forecast for the U.S. to 2.7% from an earlier projection of 3%. Growth this year is forecast at 1.9% because of “the excessively rapid pace of fiscal deficit reduction.”
To put the IMF’s statement into surreal context:
- The IMF firmly suggested that Europe adopt austerity policies.
- America tried to talk Europe out of its austerity policies.
- America has adopted its own version of austerity and calls it “sequestration.”
- The IMF said “Oops, my bad,” and thinks Europe should give up austerity.
- Now the IMF tries to talk America out of austerity.
- BUT – with some exceptions, Europe is still practicing austerity.
- And America is still down with the sequester.
Too bad we all can’t agree that while fiscal responsibility is important, practicing austerity at a time when the global economy is in the limping stage is beyond stupid.
I sense wacky times ahead for anyone who’s not rich and even those folks may not be safe…
song currently stuck in my head: “one more night” – blue six
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