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Title: IMF raises spectre of civil wars as global inequalities worsen
Source:
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URL Source: http://www.telegraph.co.uk/finance/ ... obal-inequalities-worsen.html#
Published: Feb 3, 2011
Author: Ambrose Evans-Pritchard
Post Date: 2011-02-03 14:14:46 by Capitalist Eric
Keywords: None
Views: 1218
Comments: 3
Dominique Strauss-Kahn, the IMF's chief, said the economic rebound across the world is built on unstable foundations, with many rich nations still strapped in job slumps while the rising powers of China, India and Brazil already facing the threat of overheating. "It is not the recovery we wanted. It is a recovery beset by tensions and strain, which could even sow the seeds of the next crisis," he said. "Global unemployment remains at record highs, with widening income inequality adding to social strains," he said, citing turmoil in North Africa as a prelude to what may happen as 400m youths join the workforce over the next decade. "We could see rising social and political instability within nations – even war," he said. The IMF has published a paper entitled Inequality, Leverage and Crisis arguing that the extreme gap between rich and poor – with echoes of the US in the late 1920s – was an underlying cause of the Great Recession from 2008-2009. The paper, by the Fund's modelling unit, warned of "disastrous consequences" for the world economy unless workers regain their "bargaining power" against rentiers. It suggests radical changes to the tax system and debt relief for workers. Mr Strauss-Kahn said the toxic global imbalances that caused the financial crisis are re-emerging, naming China and Germany as the two arch-sinners that rely on export surpluses to power growth at the expense of the US and other deficit countries. "The most important question is to deal with the recurrent problem of some countries' large external surpluses," he said, warning that failure to curb excesses will lead to global clashes and rising protectionism in trade and finance. In a veiled warning to China and other countries holding down their currencies for commercial advantage, the IMF chief said "exchange-rate adjustment should not be resisted". Nor should capital controls be imposed to stop the inflow of funds. The comments appear to align the IMF behind Washington in the simmering dispute over the declining dollar. China and Brazil have accused the US of covert currency warfare through quantitative easing, but the claim is slippery since the US has a huge structural trade deficit. Mr Strauss-Kahn also hinted that parts of Asia are exceeding the safe speed limit for growth and needed to "tighten" further before inflation gets out of control. "There are risks of overheating, and even a hard landing," he said.
The International Monetary Fund (IMF) has warned that "dangerous" imbalances have emerged that threaten to derail global recovery and stoke tensions that may ultimately set off civil wars in deeply unequal countries.
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#1. To: Capitalist Eric (#0)
Since January 3, 2011, Republicans have controlled the power of the purse.
Since January 3, 2011, Republicans have controlled the power of the purse.
WTF are you babbling about?????????
"There will be no more money when the U.S. dollar has no value, until that time we can keep printing more." -- go65, LF's answer to Ben Bernanke -- We always like cool X-rays, right? In 1979, the effective tax rate on the top 0.01 percent (i.e., rich people) was 42.9 percent, according to the Congressional Budget Office. By Reagan's last year in office it was 32.2 percent. From 1989 to 2005 (the last year for which data are available), as income inequality continued to climb, the effective tax rate on the top 0.01 percent largely held steady; in most years it remained in the low 30s, surging to 41 during Clinton's first term but falling back during his second, where it remained. The change in the effective tax rate on the bottom 20 percent (i.e., poor and lower-middle-class people) was much more dramatic, but not in a direction that would increase income inequality. Under Clinton, it dropped from 8 percent (about where it had stood since 1979) to 6.4 percent. Under George W. Bush, it fell to 4.3 percent.
#2. To: Capitalist Eric (#0)
#3. To: go65 (#1)
In 1979, the effective tax rate on the top 0.01 percent....
Here's one of our own American Socialist,
"godwinson," resident socialist goober.
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