The IMF is warning the U.S. that the global slowdown is worsening and it has cut its growth forecast for the second time since April. The U.S. and European policymakers failure to fix the economic woes is going to prolong the slump.
Global growth in advanced economies is to weak to bring down the unemployment, (unless you are obama, where the numbers are swayed, and those who give up are counted as non persons any longer,and 52,000 part time jobs are counted as full time employment, then you have a labor dpt. who will drop the unemployment numbers regardless of how high they really are)
Policymakers have flagged the U.S. “fiscal cliff” — government spending cuts and tax raises due to take affect early in 2013 — and resolving the euro area’s debt crisis as the top issues facing the global economy.
Europe’s debt crisis is “a clear and present danger,” Canadian Finance Minister Jim Flaherty said last week.
The IMF forecast that global output in 2012 would grow just 3.3 percent, down from a July estimate of 3.5 percent.
That would make this the slowest year of growth since 2009 when the world was struggling to pull out of the global financial crisis. It predicted only a modest pickup next year to 3.6 percent, below its July estimate of 3.9 percent.
It projected U.S. growth would be a little more than 2 percent this year and next, but forecast a contraction in the euro area this year by 0.4 percent and modest growth in 2013 of 0.2 percent.
A clear indication that obama’s policies have not worked.
IMF took a sharp knife to its estimates for India and Brazil, with the latter now seen growing slower than the United States this year.
The IMF said “familiar” forces were dragging down growth in advanced economies — fiscal consolidation and a still-weak financial system, the same problems that have plagued the world since the global financial crisis exploded in 2008.
“More seems to be at work, however, than these mechanical forces — namely, a general feeling of uncertainty,” Blanchard said in a commentary on the forecasts.
Measures of risk and uncertainty remain at low levels, Blanchard pointed out, which makes it difficult to assess the nature of the uncertainty.
“Worries about the ability of European policymakers to control the euro crisis and worries about the failure to date of U.S. policymakers to agree on a fiscal plan surely play an important role, but one that is hard to nail down,” Blanchard said.
The IMF said financial conditions are likely to remain “very fragile” over the near term because repairing euro zone problems will take time and there are concerns about how the U.S. economy will cope with the expected spending cuts and tax increases.
The “urgent policy priorities” for the United States should include avoiding the fiscal cliff, which the IMF said at the extreme would amount to a fiscal withdrawal of more than 4 percent of GDP in 2013, and economic growth would stall.
In other words we need a man in the White house that can lead and the economy in it’s clear and present danger, that man is not Barack Obama. angel
some sources from nbc