Writing in Business Week, Jeffrey E. Garten describes one aspect of the Bush economic failure:
Our balance of trade and investment flows is deteriorating fast, heading toward an unprecedented 6% of gross domestic product. This is a 25% increase from last year. We now owe $3 trillion abroad, up 100% since 2000, and we need to borrow more than $1.5 billion per day from overseas lenders.
Right now, in fact, foreign creditors are providing two-thirds of America's net domestic investment. If they lose confidence in the U.S. economy, they could quickly sell billions of dollars worth of Treasury bills and bonds, sending the dollar plummeting and sparking a global currency crisis.
The Federal Reserve would then have to hike interest rates sharply to attract money from overseas. American mortgages, car loans, and credit-card bills would soar. The economy could go into recession. [More tough questions 10/11/04 Business Week subscription] (Story links open in new windows)
The situation is even worse than that because the Bush administration may take down the world, not just this country, through it's reckless fiscal policies .
That sounds extreme - I thought so, too - but it was the International Monetary Fund (IMF) and the World Trade Organization (WTO) saying it.
The story isn't from some "leftie" tract - it's in the Wall Street Journal:
Two international economic watchdogs warned that President Bush's budget plans will make the U.S. and other countries poorer in the long run.
The International Monetary Fund (IMF) ... estimates that even if the budget deficit is cut in half from $521 billion by 2009, as the Bush Administration projects, U.S. gross domestic product would be 1.4% lower by 2020... For the world, GDP will ultimately be 2.6% lower by 2050.Continued on the next page Page 1 — Page 2
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