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IMF Risk

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To justify the mega bailout proposed by the U.S. Government.U.S. President George Bush said the following: I will say to our citizens and I’ll keep reminding them that the risk of doing nothing is far greater than the risk of the package () and that in the long run are going to recover much money. It is true that this mega rescue joined the previous bailouts carried forward by the Government of the United States.UU., will involve a cost of over one billion dollars to American citizens. The sharp increase of public debt that these actions imply, are undoubtedly at risk the solvency of the U.S.

Government. By their myopia, the rest of the developed enconomias, which only cares that the USA.UU. take care of the problem, supported this initiative without measuring the effects that may arise from it. The initiative’s purchase of toxic assets involves increasing the ceiling of the public debt at US $11.3 trillion (this being the second time in the year in which the upper limit is raised). To get an idea of what we are talking about, must say than GDP estimated for 2008 us.UU. found in the $14.2 trillion (according to estimated the IMF in its World Economic Outlook Database, April 2008). The strong increase involving in fiscal terms, the plan will be a burden that will force the next government management to have a less belligerent than that observed international attitude in managing George Bush. The new Government will be forced to carry out cuts in public spending if it wants to avoid creating greater instability in their fiscal accounts and higher inflationary pressures. In this context, war expenses, especially as linked to US troops in Iraq, appear as the first component of spending to trim.


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