Economic Turmoil: International Monetary Fund

Term Prospects Dept: Today s headlines are understandably all about the economic turmoil in Europe and the deficit in the United States. The G20 is floundering in trying to cope with what s happened to the world economy since the 2008-2009 recession. The International Monetary Fund has lowered growth expectations for the world, the Federal Reserve for the U.S., private-sector economists for Canada, according to Globe and Mail. The short-term economic prospects, therefore, aren t encouraging. Aging will test the long-term prospects and fewer people will be working to support those who aren t. The consequences will be twofold: Government revenue growth will fall, and government spending obligations will rise. Thus, there ll be unavoidable pressure for higher taxes or spending cuts, or both. Pick your poison. These are short-term blows, to be sure, that are causing difficult decisions about taxing and spending. In Europe, these decisions have brought crisis meetings, bailout packages, street protests; in the U.S, these decisions have been delayed and delayed again. They now appear to have been pushed off until after the next election, meaning no action before 2014 at the earliest. (www.immigrantscanada.com). As reported in the news.