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A horror story is coming
The IMF does not take into account the near certainty of a global downturn at some point over the next five years. A deep recession would push the deficit into double digits, and send the debt ratio spiralling towards 140 per cent in short order.
There is no justification for Trump’s stimulus. The output gap has already closed. The fiscal “multiplier” is less than one. The US unemployment rate is approaching a 48-year low. The New York Fed’s “underlying inflation gauge” surged to 3.14 per cent in March, the highest since 2005.
As an aside, the IMF’s Fiscal Monitor noted that the lion’s share of Trump’s tax cuts go to the rich. The poorest two quintiles enjoy crumbs at first, but are ultimately left w…
Read the full article at: https://www.smh.com.au/business/the-economy/how-trump-s-hair-raising-level-of-debt-could-bring-us-all-crashing-down-20180420-p4zank.html