It Could Be Worse

The International Monetary Fund projects that the U.S. GDP will contract by 1.6% in 2009, canceling out a modest 1.1% growth in 2008. That’s not good, but it’s better than the IMF predicts for any developed country other than Canada. The IMF projects Germany’s GDP to be down 2.5% this year, France’s 1.9%, the U.K.’s 2.8% and Japan’s 2.6%.

Similarly, the IMF expects the U.S. to lead the way out of the global recession, with stronger growth returning in 2010 than in other developed countries. The IMF predicts 1.6% GDP growth in 2010 for the U.S., compared with 0.1% for Germany, 0.7% for France, 0.2% for the U.K, and 0.6% for Japan.

If the IMF is right, one effect of the current global downturn will be to increase the economic gap between the U.S. and rivals among the developed countries. At the same time, the IMF projects less developed economies (like China’s and India’s) to continue to gain on the developed world.

All of which offers more evidence that the hysteria currently being whipped up in Washington over the alleged need to add another trillion dollars in federal debt is overstated, at best.

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