Not exactly breaking news:
Uncontrolled U.S. budget deficits would pose a serious threat to global prosperity in coming years as rising interest rates depress economic growth in the United States and the world, the International Monetary Fund warned yesterday.
The IMF released a new analysis predicting that if nothing is done to control soaring U.S. deficits, it would cut global economic output by 4.2 percent by 2020 and reduce U.S. economic growth by 3.7 percent during the same period.
IMF economists said much of the damage would occur because of increased borrowing demands in the United States to finance the deficits. This would drive up U.S. interest rates and interest rates in other countries as the global supply of available capital is reduced, they said.
“The rest of the world is affected seriously by the U.S. fiscal deficit,” IMF chief economist Raghuram Rajan said.
Oh yeah–I forgot. Bush promises to cut the budget in half after his supposed second term ends.