In response to the Obama administration, and the Democrats’ resistance to reduce government spending, the IMF cut its U.S. economic growth forecast. The international agency, rightfully so, shows skepticism of the U.S. future economy, and says we are ”playing with fire,” as the bureaucrats in Washington resist any serious steps to reducing the deficit. Moreover, it predicts that U.S. economic growth could drop to 2.5 percent this year and 2.7 percent in the following year.
The International Monetary Fund cut its forecast for U.S. economic growth on Friday and warned Washington and debt-ridden European countries that they are “playing with fire” unless they take immediate steps to reduce their budget deficits.
The IMF, in its regular assessment of global economic prospects, said bigger threats to growth had emerged since its previous report in April, citing the euro zone debt crisis and signs of overheating in emerging market economies.
The Washington-based global lender forecast that U.S. gross domestic product would grow a tepid 2.5 percent this year and 2.7 percent in 2012. In its forecast just two months ago, it had expected 2.8 percent and 2.9 percent growth, respectively.
So both S&P and Moody’s have threatened credit rating downgrades and now the IMF is predicting a serious slowdown in long-term economic growth. When will our spendthrift politicians take the hint?
