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
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.
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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