August 19, 2009
Editor’s note: The globalist IMF knows it will be nearly impossible for the United States to “rebalance” its economy toward exports because the “free-traders” have done such a good job of dismantling the U.S. industrial base and sending it to slave labor havens in the third world.
[efoods]The International Monetary Fund has been warning for years about the risk of global imbalances — namely huge U.S. current account deficits and surpluses in China. Today its chief economist offered a grim view of how the economy might suffer if the rebalancing act fails.
Olivier Blanchard says unless the United States can refocus its economy more toward exports and China more toward imports, the U.S. recovery will probably be anemic because American consumers aren’t going to quickly revert back to their pre-crisis free-spending ways.
And if the recovery is anemic, there will no doubt be intense political pressure for more stimulus, particular in 2010 when most members of Congress face re-election.