The UK Telegraph says: “The US faces one of biggest budget crunches in world”
The crux of the Telegraph’s argument:
1) Under the Obama administration’s current fiscal plans, the national debt in the US will climb to above 100% of GDP by 2015 – a far steeper increase than almost any other country.
2) The US has a higher debt (relative to GDP) and a far shorter maturity of government debt than most other countries. Said differently, the US must rollover its increasing debt more frequently – and is, therefore, vulnerable to increasing rates and variations in demand (e.g. what if China stops buying US debt ?).
3) Bottom line (according to the IMF’s projections), the US has more to do than any other country in the developed world (apart from Japan) when it comes to bringing its debt back towards sustainable levels.
* * * * *
Full article:
http://blogs.telegraph.co.uk/finance/edmundconway/100005702/us-faces-one-of-biggest-budget-crunches-in-western-world-imf/
Full IMF Report:
http://www.imf.org/external/pubs/ft/fm/2010/fm1001.pdf
* * * * *
