From the January 2004 Idaho Observer:

IMF: U.S. budget deficits threaten global economy

Until recently, U.S. global political/military influence forced the oil-producing nations to monetize their oil in U.S. dollars. The U.S. dollar became, in essence, the petrodollar. The U.S. recently lost its oil-monetizing monopoly and oil producers are monetizing their oil in euros now. Last September 1, the euro was a penny stronger than the U.S. dollar; by September 13, the U.S. dollar had slipped to $1.15 against the euro. Today it has slipped even further to $1.46. The Bush administration and the national media claim the U.S. has “turned the corner” on an economic downturn while the value of the U.S. dollar is losing its international face value. The exchange rates between currencies are a much more real measure of value than the words of politicians. Now we have the International Monetary Fund publicly expressing its concerns about the economic viability of the U.S. dollar.

by The Idaho Observer

Dow Jones financial writer Joseph Rebello reported January 7, 2004, that International Monetary Fund (IMF) economists had just released a report describing concerns that continued U.S. budget deficits could hurt the global economy “by roiling currency markets and driving up interest rates.”

This, on the heels of U.S. financial analysts expressing confidence that the nation had “turned the corner” on a year-long economic “downturn.”

“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.”

According to the U.S. Bureau of the Public Debt, the current level of federal government indebtedness was $7.1 trillion as of Dec. 31, 2003 -- up over $250 billion from the July 31, 2003 figure of $6.71 trillion.

It appears the U.S. government has no plans to curtail spending or implement a plan to bring its budget into balance. In fact, the Bush administration projects that deficit levels will continue to expand for the next several years. “Large U.S. fiscal deficits....pose significant risks for the rest of the world,” cautioned the IMF.

IMF concerns are validated by the dollar's continued decline against the euro and the Japanese yen since early 2002.

Charles Collyns 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. “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.”

It should also be noted that the IMF was created at the United Nations Monetary and Financial conference in Bretton Woods, NH, July 12, 1944. The U.S. became an IMF member in 1945 per Title 22, Sec. 286 of U.S. Code. IMF global economic influence is due largely to U.S. participation. The U.S. has given hundreds of billions of dollars to the fund which loans money out to nations all over the world and are expected to be paid back at interest. The IMF even loans money it receives back to the U.S.

Some theorize that interest on loans from capital originating in the U.S. is a major factor in exponentially increasing budget deficits and national debt.

But the IMF researchers said the U.S. government's long-term financial obligations, such as paying out for Social Security, Medicare programs, veterans' benefits and government employee retirements over the next 75 years, will amount to a $47 trillion shortfall in its ability to pay for those other long-term obligations.

Rebello reported that, in order for the government to avoid such an astronomical shortfall, it would be forced to implement “'an immediate and permanent' federal tax increase of 60 percent or a 50 percent cut in Social Security and Medicare benefits.”

Further evidence in support of IMF concerns are found in how foreign investors are losing faith in the U.S. government's ability to resolve its long-term fiscal problems. It appears foreign investor concerns are being fueled by the IMF. “The United States is on course to increase its net external liabilities to around 40 percent of GDP within the next few years - an unprecedented level of external debt for a large industrial country. This trend is likely to continue to put pressure on the U.S. dollar,” the IMF told the world in its report.

The IMF predicts the U.S. public debt to GDP ratio will increase by 15 percent by 2015. In that scenario, “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.

The U.S. led the charge for the IMF's existence and is probably its best loan customer (and paid more interest to IMF bankers from loans that began with capital given to it by the American people). The IMF suggests Congress and the White House prevent global disaster by acting immediately to balance the federal budgets. The IMF advises the federal government to allow recent tax cuts to expire by 2013 to reduce the budget shortfall by nearly 50 percent. The IMF also suggested passing an energy consumption tax because such a tax would, “help meet the administration's environmental objectives while also providing substantial support for fiscal consolidation.”

The IMF is apparently insensitive to the fact that Americans are already being taxed into third-world slave status. It defends its plan of taxing Americans harder to pay for government fiscal irresponsibility by explaining that such tax increases would have a minimal effect on U.S. economic growth.