Thursday, September 18, 2003

IMF Sees Faster U.S. Growth

More good news on the economic front. The IMF revises its' U.S. growth estimates upwards, to 2.6 percent this year, and 3.9 percent in 2004. That's still not quite enough to meet Brad DeLong's estimate of 4 percent growth to reduce the unemployment rate, but I have a feeling that the growth numbers will be revised upwards yet again before this year is through.

The big point of worry is the same one that DeLong has been worrying about - the sheer scale of the American current account deficit, and the danger of a sudden sharp decline in the value of the dollar it risks precipitating. Bush has got to do something about the rate of government spending; the situation has simply gotten out of control, with the government deficit forecast at $525 billion (4.7 percent of GDP) for next year - far worse than the ~ 3.5 to 3.9 percent budget gaps with which the Europeans are struggling.