US shouldn't add to deficit to pay for Katrina, says IMF

[UpInArms]

http://today.reuters.com/news/newsArticle.aspx?type=reutersEdge&storyID=2005-09-21T195214Z_01_MOR171455_RTRIDST_0_PICKS-ECONOMY-IMF-RAJAN-USA-DC.XML

WASHINGTON (Reuters) - The United States should not add to its already hefty budget deficit to pay for rebuilding after Hurricane Katrina, and find funds elsewhere, the IMF's chief economist Raghuram Rajan said on Wednesday.

In an interview with Reuters, Rajan said the economic effects from Hurricane Katrina were likely to be relatively small to a large economy like that of the United States.

"A certain amount of spending has to take place directly to deal with the consequences of Katrina," Rajan said.

"The right thing to do is if your spending priorities are altered to find savings elsewhere and hopefully that is the process that will take place now," he added.

...more...

Perhaps we should alter that spending that is going to Iraq?

[tk2kewl]

1. Simple answer... cancel the tax cuts

[GCP]

2. But, but, but, Paris needs her inheritance!

:sarcasm:

[Darranar]

3. No, the IMF wants social welfare cuts, not war cuts.

Especially not cuts to a war whose intention was partially to produce a government that will embrace all the neoliberal IMF plans for self-destruction.

That is the point of this - the idea that some abstract "economy" is more important than human lives and human welfare.

[ClintonTyree]

6. Screw the IMF..........

put an end to bush's fucking war, NOW! Katrina AND Rita are taken care of instantly. By the way, where is Texas going to get National Guard troops to help out after landfall, Alaska? Everything is spread WAY too thin because of bush's war. END IT NOW! Man, I hope the protests in DC grow to a tremendous size, so big that the MSM can't even ignore them. I'm talking a 60's style demonstration, shut the damned city down.

[adaada]

7. I tho't the IMF was recognizing the error of some of its draconian actions

the ones that had caused so much suffering in third-world countries over the years.

Are we now getting a taste of our own medicine? (IMF telling us how to handle our economic problems)

[WhiteTara]

9. Paul Wolfowitz is the new president

of the IMF and he is a disgusting excuse for a human, who calls himself a neocon. Don't look for anything real to come from them.

Welcome to DU adaada :hi:

edited to welcome adaada

[struggle4progress]

12. President of the World Bank, y'mean. Hard to tell burglars from thieves,

of course ...

[charlottelouise]

17. Ummm..

Actually, Wolfowitz is President of the World Bank (where he can certainly do plenty of harm...). The World Bank's mission, according to their material is:

The World Bank Group’s mission is to fight poverty and improve the living standards of people in the developing world. It is a development Bank which provides loans, policy advice, technical assistance and knowledge sharing services to low and middle income countries to reduce poverty.

Obviously the right spot for Wolfowitz....:sarcasm:

There are some ties between the World Bank and the IMF, but the IMF is a separate institution, whose purpose (again according to their own material) is:

The IMF is the central institution of the international monetary system—the system of international payments and exchange rates among national currencies that enables business to take place between countries.

Traditionally, the US has nominated the president of the World Bank aand the Europeans nominate the IMF Managing Director, currently Rodrigo de Rato y Figaredo. That arrangement is, as I recall, the reason the World Bank Board of Directors let Wolfowitz in. (http://news.bbc.co.uk/2/hi/business/4358617.stm">BBC story )

Actually, the IMF isn't too pleased with the US, and for reasons that I think most folks here would agree with. This isn't to say that the IMF hasn't a lot to answer for, but as far as current US fiscal policy goes, I think they have it right.

Anyways, here's what IMF Managing Director Rodrigo Rato, in a speech in April 2005, had to say:

“Finally, the continuing build-up of the large U.S. current account deficit—with counterpart surpluses mainly in Japan, emerging Asia and, increasingly, Middle-East oil-producing states and the CIS—is a mounting concern. To date, the U.S. deficit has continued to be financed relatively easily, aided by substantial flows from the Asian official sector, and the adjustment in the U.S. dollar has been orderly. However, the demand for U.S. assets is not unlimited. A sharp reduction, or a reversal, of capital inflows could entail serious consequences for currency and capital markets. The recent episodes of market reaction to the possibility of a diversification in central banks' international reserves remind us of the potential risks.”

[adaada]

18. Thanks for that informative post. eom

[struggle4progress]

11. They probably want us to privatize our public water supplies.

[krkaufman]

4. Hey, Rajan..... I M F U !!!!!! n/t

[The_Casual_Observer]

5. Why not sell high interest Katrina Bonds? I would buy a few myself.

[Inland]

8. The IMF? You mean, the agency that pillories third world countries

about their finances is putting the US on it's watch list?

I bet WHO and blue helmets are already in NO.

The US is in the downward spiral.

[rodeodance]

10. well, since this is an International agency, I am sure jr will ignore them

[barb162]

13. time for monkey to raise taxes and start getting the out-of-control

deficit back in some control

[tom_paine]

14. But the Busheviks mission is to bankrupt Amerika

And so, debt being a goal worthy in and of itself (to the Busheviks), more debt is what we shall get.

[American Infidel]

15. The answer is right in front of you

Raise taxes, don't cut medicare or other social programs, morons.

[VegasWolf]

16. Yeah Wolfie! Go back to licking your hair you turd! nt