Friday Sep 21, 201201:38 PM GMT
GOP 'cranks and crazies' threaten US, global economy: Australian deputy PM
Fri Sep 21, 2012 1:33PM
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Australia's Treasurer Wayne Swan

 

Australia's Treasurer Wayne Swan says ‘‘cranks and crazies’’ in the U.S. Republican Party are threatening economic growth as Congress remains deadlocked on tax increases and spending cuts set to take effect in January.

 

‘‘Let’s be blunt and acknowledge the biggest threat to the world’s biggest economy are the cranks and crazies that have taken over the Republican Party,’’ Mr Swan said in a speech in Sydney Thursday.

 

 ‘‘Global markets are nervously watching the positioning of hardline elements of the Republican Party for signs that they will dangerously block reasonable attempts at compromise.’’

 

U.S. lawmakers are deadlocked over how to resolve the so-called fiscal cliff, the combination of more than $US600 billion in automatic tax increases and spending cuts that will go into effect next year if Congress does nothing. The Sydney Morning Herald

HIGHLIGHTS

Swan, named by banking magazine Euromoney as its finance minister of the year in 2011, labeled the Tea Party wing of the Republicans as "extreme" and a threat to the U.S. economy. Telegraph

 

Prime Minister Julia Gillard, who travels to New York next week to address the United Nations General Assembly, defended her deputy's comments as "appropriate." Huffington Post

 

"What happens in the U.S. economy matters to the world economy and it matters to us," she told reporters. "Wayne Swan was making that very common sense point today." Huffington Post

 

Federal Reserve chairman Ben Bernanke has said the fiscal cliff is one of the main sources of risk for the U.S. economy.

FACTS & FIGURES

Political infighting over the "fiscal cliff" threatens to wipe out the U.S.'s fragile recovery with "very bad" consequences for the rest of the world, a senior International Monetary Fund economist has warned. Guardian

 

Updating its annual report on the U.S. economy in August, the IMF said the recovery remained "tepid", and risks to that recovery had intensified, "including from the worsening of the euro area debt crisis as well as the uncertainty over domestic fiscal plans." Guardian

 

For the first time in over a year global investors think the U.S. fiscal cliff is more of a risk to the global economy than Europe's sovereign debt crisis, according to a survey conducted by Bank of America.

 

Total U.S. government debt topped $16 trillion earlier this month, as total federal borrowing continues marching toward the $16.394 trillion borrowing limit. WSJ

 

The sequestered cuts coming in January were triggered by the failure of the 2011 supercommittee to reach a compromise on deficit reduction. The Pentagon says the looming defense cuts will devastate the military. The deal also cuts non-defense spending, but shields most entitlement benefits. The Hill

SAR/HJ

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