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IMF Slashes US Growth Expectations; Pushes Higher Minimum Wage, Removing Tax Loopholes & Fiscal Stimulus
Who could have seen that coming? The IMF has slashed US growth expectations for 2014 from 2.8% to 2.0% (with 2015 hockey-sticking back to 3.0%). The IMF also warned the Fed should be "mindful of financial stability," but that is not the most surprising aspect of the IMF's mea culpa as they plunge head first into policy decisions...
- *IMF RECOMMENDS RAISING U.S. MINIMUM WAGE
- *IMF RECOMMENDS ADDITIONAL U.S. INVESTMENT IN INFRASTRUCTURE
- *IMF RECOMMENDS LIMITING OR ENDING ITEMIZED TAX DEDUCTIONS
And then there's this...
- *LAGARDE SAYS IMF'S CUT IN U.S. OUTLOOK TIED TO 1Q WEATHER
As Bloomberg reports,
The International Monetary Fund cut its growth forecast for the U.S. economy this year and said the Federal Reserve may have scope to keep interest rates at zero for longer than investors expect.
The Washington-based IMF now sees the world’s largest economy growing 2 percent this year, down from an April estimate of 2.8 percent. The IMF left a 2015 prediction unchanged at 3 percent, and said it doesn’t expect the U.S. to see full employment until the end of 2017, amid low inflation.
For the Fed, the forecast means “policy rates could afford to stay at zero for longer than the mid-2015 date currently foreseen by markets,” the fund said in its annual assessment of the U.S. economy.
Then they piled into policy...
They urged the U.S. to raise the minimum wage, invest in infrastructure and overhaul immigration policies to boost potential growth as it slips below the long-term average.
The IMF also urged the implementation of more proactive labor market policies, which included strengthening the Earned Income Tax Credit and increasing the minimum wage to align more closely with U.S. historical levels and international standards.
“This would help raise incomes for millions of working poor and would have strong complementarities with the suggested improvements in the EITC,” said the report.
And worries about bubbles and fragility...
The Fed has to contend with “multiple areas of uncertainty,” making the outlook for its policy “particularly uncertain,” according to the IMF. That is “in contrast to the narrow range of market views on the path for future policy rates as well as the current historically low pricing of asset price volatility.”
Even if the Fed communicates well its planned increase in interest rates, there’s still a risk for “significant swings in market flows and prices” in coming months, including beyond U.S. borders, the IMF said.
Finally, and perhaps most worrying for the bond bears is the new terminal rate low growth new normal appears to be confirmed...
The IMF also said it foresees longer-run potential growth averaging around 2 percent for the next several years, below historical averages and less than last year’s estimate. A year ago, the IMF projected potential growth rates at 2.3 percent in 2015-2016 and 2.4 percent in 2017-2018.
One wonders, rhetorically of course, if the IMF also pulled a "Polish Central Bank"
and suggested that the US fire all Republicans in return for this
suggestion; and we wonder how El-Nino is "priced-in" to this forecast.
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Meanwhile the e-minis explode higher out of the gate, BTFD bitchez!
If the minimum wage goes up, do I get a bigger unemployment check?
So basically, the IMF recommends that the US takes action to hurt the economy even more. Wonderful. I can't wait for the NWO and the coming utopia. 2% growth still seems optimistic, but with the bs numbers, GDP could "beat" the expectations.
This from a group of bureaucrats who pay zero % in tax.
I suppose they would have also recommended that we buy an infinite amount of STAWKS but apparently that is already being handled at the highest levels...
Not only is the IMF a tool of the CBs it appears to have gone full librtard!!
Me thinks you've missed the point. The banks live to keep the status quo, the elite skim off the top and reinvest and round and round, it's not about ideology.
But they will pay a "head tax" later.
That's absolutely nothing compared to what they told the Greeks to do.
"Sell your kidneys and send the proceeds to your government, foreign banks are counting on you"
Hurting the economy more is not what drives those recommendations. The recommendations are meant to maintain the status quo for as long as possible. The recommendations drive increasing structural debt AND inflation, which work hand in glove. GDP is a red herring in all of this. It's a meaningless statistic. Our eCONomy is based, in part, on a game of pretend as we trade trinkets amongst ourselves, measured in DOLLARS, and reported as GDP. It's a bit of shell game built on top of the Ponzi scheme of a monetary system where ALL money is debt with interest attached.
To be perfectly clear... I'm not defending the IMF's recommendations, but people need to understand the fundamental flaws (unfixable flaws) that are core to our predicament.
Good analysis.
Let me add that the recommendation for an increase in the minimum wage is really a tax increase. An increased minimum wage will bump up SS and Medicare tax receipts, at least on paper, and enable the DC US to buy maybe one more year.
lol ... never even thought about this.
I love how no matter what the government does it is just screwing up the situation more and more and moar.
But that's exactly what a bloated pig of a government like ours does to keep justifying their existence.
They keep fucking things up and creating disasters like global warming so the sheeple want an even moar bloated government to save them!
And of course the same government does all it can to obliterate even the concept of individual responsibility so the sheeple become moar and moar dependent on it.
It's known as "government creates its own demand."
Just as long as the sheeple bleat out for more.
In addition to causing misery, .gov is most expert at can kicking.
"I love how no matter what the government does it is just screwing up the situation more and more and moar.
If you look at everything they do in the context of causing intentional damage to the many in order to benefit the few, it all begins to make sense.
Do you think anyone in government would ever recomend that we return to the tried-and-true system where "wages" are negotiated between the employer and employee? No, that would destroy the central planning from which their power is derived.
If the IMF wasn't so evil I would call them stupid.
pods
=====================FUCK THE IMF======================
Fuck the IMF
AND THE EU
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........('(...´...´.... ¯~/'...')
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You would wear out that finger raising it to all the .gov and para-governmental agencies that deserve it.
Laugh track deafening now, for so many, many reasons. IMF? Really?
do the EXACT OPPOSITE of what the IMF prescribes.
The IMF recomends free deserts and playtime for volunteers in the US
Pretty political....who do they think they are.....
Banksters mafia of the world. Most of politicians of the countries on this planet must obey what they say and claim.
Newsflash: the FED CAN'T raise interest rates. Each 1% = 150 billion in new debt. Welcome to the new normal.
Well this has got to be bullish! It's all bullish!! What a joke this all has become!
Fuck the IMF, and the oompa wanna-be running that criminal syndicate.
F* the IMF. Mind your own biz...
They don't have any business to mind.
Thus yours will have to do.
It's only "fair".
thank you IMF, oh magnificent and all-seeing one.
now stfu
U.S. note to self: "Do the exact opposite of what IMF states. The IMF equates to the being the Geroge Costanza method of success, doing the exact opposite of what he thinks is right.
IMF remind us all if your top execs pay any income tax?? 0% you say, of course tax loop holes have no meaning to that elite reptile cartel. at ZH i recommend to the FED that no one pays income tax to .gov see how fast our military comes home from those 100's of bases across the world.
I think the IMF is simply reminding us that the workers are also the buyers of goods and services. If you starve them, eventually that does rise to the top and your economy dies as you no longer have consumers able to purchase anything.
Unlike trickle down, which never happens, trickle up is guaranteed. Don't believe it? Just wait! American Spring is coming.
Craig
They wouldn't starve if prices didn't rise due to inflationary policies implemented by the government and Fed (like minimum wage)...
But that's EXACTLY how our system was designed. Debt issued as money with interest attached. Only the "system" doesn't contain both the principal and the interest. Sooooo.... more debt must be created/loaned into existence at ALL TIMES. It's a scam, but it's our reality. There is no fix.
This is correct... and it's part of maintaining the status quo. It's not a "solution" mind you... it just kicking the can a little further down the road. The road ends at the collapse of the currently economic/monetary system. What that timeframe is or what's next is way beyond me.
i am telling the IRS i lost all my tax data.
Well, the IMF says get rid of itemized deductions, so it won't matter. They have records of all your reported income.
My advice to anyone who can swing it is to start an LLC and run everything you can through it. Mine is about to buy me a pick-um-up truck.
Even the European markets having trouble following this ridiculous US ramp today
To get to 2% for 2014 we have to average 3% per quarter for Qs 2 thru 4. Expect a further revision for 2014 to 1.25%, and a reality of 1.1% when all is said and done and printed.
Are you fucking joking? Who in the hell does this group think they are?
Bring back the French Rapist.
So is that 2% est WITH all of the policy suggestions?
So are they saying if we don't do that the economy will be slower?
The IMF (international mother-fuckers) says raise he minimum wage! So do I, raise it to $50.00. That would fix everything!
sarc/
Min wage to $100 and tax rate to 100% will fix everything. /s
The IMF is just recommending what our commander in chief has been stating for years. Now with the IMF stating this, the administration will have even more firepower. If it backfires then they can blame the IMF even though the IMF is nothing but a mouthpiece for the USA government! WIN WIN for the politicians! Blame someone else!!
Hell our GDP looks even worse if you use last years metrics. Oh I forgot we had to revise histroy last year by changing the metrics once again and changing the history of the GDP going all the way back to when they started using it! Well those in charge get to write and re-write history!
"If it backfires then they can blame the IMF even though the IMF is nothing but a mouthpiece for the USA government!"
Word on the street is,it's where the Criminal CIA parks & launders their Herorein money.
The IMF told the UK they were doing the wrong thing with austerity a couple of years ago.
Wow, all overnight gains in gold completely eliminated, and markets in the green. I was out this morning---did the situation in the Ukraine resolve, and Iraq is now stablized?
Actually, the usual lately--geopolitical unrest gets you a 3 dollar pop in gold, and when it is "jawboned" away, gold drops by 50 dollars/oz.
I might have been for limiting itemized deductions until the IMF stuck its nose in, now I'm against anything the IMF is for.
More like the cut was tied to lack of woar. They are already priming the anus for penetration of the next round of lies/excuses.
wow, what a surprise. i'm shocked. wake me up ...................... :0
IMF recommends a wealth tax on middle class pensions and real property.
The rich are exempt because they are too wealthy to fail.
I guess Mittens isn't the rich member of the club he thought he was, since the proposed 3m cap on IRAs that Obozo advancing is not compatible with his obscene 100M+ IRA.
With a 20 year life expectancy retiring at age 65, and assuming one can keep up with inflation, that 3M is only 150,000/yr in current dollar income, and if they force distributions over 5 years, then keeping up with inflation with taxable retirement savings will be that much harder, particularly since RETIREES should NOT be 100% allocated to equities.
But then then we expect the banksters' own "Profit-to-Earning Ratio" organ grinder to understand such basic financial concepts.
FOR INTELLECTUALLY/SARCASTICALLY CHALLENGED - SEE OBOZO's PROPOSED 2015 BUDGET - he's beating the IMF to the punch.
Lower Largarde!!!! LOWER!!!! LOL
2.0% growth says that the US has 9 months to grow 4.0% as, magically, the US economy shrank 2.0%.
April and May retail numbers were shit.
Q2 GDP - welcome the disaster.
But then again, gewbermints will cook the numbers as best they can despite the fact that 50M Americans remain on food stamps.
real gdp is negative, bitch.
-9%
Thank you for the laugh of the day....for now.
The best thing Christine Lagarde has going for her is her looks.
IMF recommends the US become France.....
Downgrade !, downgrade !, downgrade !, downgrade !
Junk status in sight.
Nothing about raising the capital gains tax rate though, eh?
The IMF had growth expectations for the US? That would be funny if it wasn't so sad.
There is just no way the US is going to recover with this kind of idiotic financial bureaucracy. Who the fuck is Legarde to tell a business owner how much he should pay employees or how much he can even afford to pay employees? If the IMF is unable willing to pay the extra wages itself, why should it think anyone else can?
Why (and who cares) does the IMF comment on US polital affairs?
"IMF RECOMMENDS RAISING U.S. MINIMUM WAGE, ADDITIONAL U.S. INVESTMENT IN INFRASTRUCTURE, & LIMITING OR ENDING ITEMIZED TAX DEDUCTIONS"
I recommend the IMF be shut down.
Q1 GDP -1.6% Q2 GDP -2.0% but annualized we're looking at +2%?
Yup, that 3rd and 4th quarter are going to be bombastic.
What are these people smoking?
complementarities
Had to look that one up. Glad i did, got on a tangent on quantum mechanics.
The Fed has to contend with “multiple areas of uncertainty,” making the outlook for its policy “particularly uncertain,”
That seems pretty certain.
If IMF were a poster on ZH they would be plonk bait.
The weather!!!!
Holy Shit we must look really fucking dumb, because they aren't even trying any more.
or Ms Lagarde wanted to be sarcastic
like
LAGARDE SAYS IMF'S CUT IN U.S. OUTLOOK TIED TO 1Q WEATHER /Yeah, /Sarc: let's call it "the weather"
though I understand public sarcasm is not allowed to IMF employees, so I suspect a certain number of them lurks here on ZH
----
one thing I'm not sure is: since when does the IMF give policy advice to the US? Everybody else, yes, but the US? and what's the whole frigging point?
Just in!
I (as in me, with no MF, mutherfuckers) say US GDP will be extinct by 2016.
Of course, "official" guberMINT money numbers will express an alternative reality that US GDP is growing at 5-6% per year because of the additions of blow sales, hooker income, skinflutehomosuckingdicks, pond goldfish growth, moar iCrap, dog barks being worth $2 a crack, record aloe harvest, Monsanto, birth-death model hitting all-time highs and other nonsense that doesn't really matter as long as...
THE FEDRES KEEPS BUYING STAWKS WITH MONEY CREATED OUT OF THIN AIR.
All you need to know in one line. The global economy has become pure fantasy.
skittle-shitting Unicorns as far as the eye can see.
Oh, yeah, and some soylent green for good measure, after ISIS is defeated (again) in Iraq and Putin decides to just give Ukraine all the NATGAS it needs.
Glory, glory, halelujah! Thank goodness INDEPENDENCE DAY is less than 3 weeks off. The over/under on Greewald/Snowden reveal of the NSA "list" is 3-1 before July 4, 2-1 ON July 4, even money forever after.
I just hope Tom Hanks, Al Sharpton, Demi Moore, Quentin Tarantino and other celebs and pols are heavily over-represented.
God Bless America! Send moar troops to Iraq! USA! USA! USA!
Did I cover everything? Back to learning some jazz riffs. C YA...
Christine L. and the whole IMF have been always reliably accurate: each time they overshoot.
In The Wizard of Oz, at least Oscar Zoroaster seemed a bit perturbed upon being revealed by Toto; the burnt orange humbugs at the IMF so far have exhibited no such modesty. BTW tanline on that bitch must be obscene.
The IMF appears to be terrifed of deflation. Their "solutions" are focused on increasing demand while ignoring the underlying problem of unproductive debt.
The 99% are paying for almost two decades of crony-capitalists instructing their government minons to socialize risk while privatizing profits for the 1%.
Thankfully, economic reality trumps political machinations.
The situation will get uglier over the next few years or so, however the future looks good for those frugal Americans who are debt free and have focused on accquiring productive assets and the knowlege to efficiently utilize them to service realistic levels of demand.
US federal gov't should have been investing in infrastructure and in a huge way after commodities prices collasped in '09 and 10-year Treasuries especially made it absurdly cheap. US isn't even investing right now to keep almost every major infrastructure area up to present levels let alone to backlogged rates and future population expansion. Hell the US federal gov't spends less than half of what it did on infrastructure spending now than in the heyday of the '45-'70 period.
Or better:
IMF RECOMMENDS DOUBLING ALL WAGES IMMEDIATELY AND INCREASING MANDETORY WITHHOLDING TO 75% (W4? We don't need no stinking fucking W4, 75% on ALL HAHAHAHAHAHHHAAAHAHAHHAHAHHAHA)
Wouldn't it be hilarious to hear Christine do a standup routine? Yay for ZH tracking on the BS meter.