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US warned over ‘chronic fiscal deficit’

US fiscal deficit news
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The International Monetary Fund (IMF) has criticized Washington for the persistent “misalignment” of its fiscal policy.

US budget deficits and soaring debt present a “growing risk” to the global economy and must be urgently addressed, the International Monetary Fund (IMF) warned on Thursday.

The country’s national debt is piling up, approaching $35 trillion, data shows. The US federal budget deficit jumped from $1.4 trillion in fiscal 2022 to $1.7 trillion last year, according to the IMF’s latest figures.

The Congressional Budget Office, the official fiscal watchdog in the US, predicted earlier this month that the deficit was likely to hit $1.9 trillion this year, representing around 7% of GDP.

“Such high deficits and debt create a growing risk to the US and global economy, potentially feeding into higher fiscal financing costs and a growing risk to the smooth rollover of maturing obligations,” the IMF said in a statement on its ‘Article IV’ review of US economic policies.

“These chronic fiscal deficits represent a significant and persistent policy misalignment that needs to be urgently addressed,” it added.

The US exceeded its debt ceiling, which was legally set at $31.4 trillion, in January 2023. After months of warnings regarding an imminent default from the US Treasury, President Joe Biden signed a debt bill in June 2023 that suspended the cap until January 2025. This effectively allowed the government to keep borrowing without limits through next year. Debt spiked to $32 trillion less than two weeks after the bill was approved, and has been ballooning ever since.

The IMF also directed harsh criticism toward Washington’s increasingly aggressive trade policies. In an apparent reference to escalating tensions with China, the watchdog said the country’s “ongoing expansion of trade restrictions and insufficient progress in addressing the vulnerabilities highlighted by the 2023 bank failures” could undermine financial stability around the world.

The IMF statement is just the latest warning on US overspending. On Tuesday, the Organization for Economic Cooperation and Development (OECD) said the US debt-to-GDP ratio was at its highest since World War II. The debt-to-GDP ratio is a metric used to gauge a country’s ability to repay what it owes.

Last year, the nation’s debt surged to 122% of its GDP, according to the OECD.

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Source:RT News

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7 COMMENTS

  1. JP Morgan invented ” credit default swap” to indebt nearly every one to bankers on the planet earth. Includig the ” poors” unable to pay back their loans ( their houses were taken back remember). It was sold worldwide and banks made first huge profits. Default was insured and so many defaulted that insurance cies went bust. It caused the first financial crisis in 2008. It was the beginning, but not the end . Central bank thought that with ” quantitative easing” ( printing money) they could resolve the problem. Not. It is always beter to face the music in my opinion. But most humans are plain cowards. And so the “defaults” have grown like a snowball and no insurance can fill the gap. And is going soon to explode as there are still so many people unable to reimburse the bankers. Bankers that should have gone bankrupt in 2008.
    That is in a short simplification what is happening.
    Yellen can yell what she can. It wont change anything.

  2. Since the Fed has all the money. I meant the 15 families. Make a law to bring back the currency to the US government and cancel the debt. The money was just printed anyway and it is not backed by gold.

    • Loans were given world wide. And risks of unpaid were divided, sub divided, sub sub divided ( tranche) and sold again as bank ” products” ( investments) and so on . Home and abroad. So it is not a US domestic affair
      It is like a worldwide ponzi scheme.
      That is why bankers, central banks, the BIS ( bank for internationsl settlement) and informed citizens are buying gold, or silver ( silver is still cheap, buy if you can)anything really to protect their assets or savings for when the whole monetary system breaks down.
      Banks own your deposit. Legally. And it will be confiscated by them if they get the chance.
      Nobody seems to know that, i did not either. Watch a.o. lynette zang. But there are other channels saying the same.
      Also ” the great taking” free on line to download

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