US and Europe Downgraded: Who is Surprised?

The International Monetary Fund has downgraded its economic outlook for the US and Europe. No surprise. The only rational question is: "Has the IMF downgraded these profligate nanny state losers enough?"

"The global economy has entered a dangerous new phase," said Olivier Blanchard, the IMF's chief economist. "The recovery has weakened considerably. Strong policies are needed to improve the outlook and reduce the risks."

The IMF has also lowered its outlook for the 17 countries that use the euro. It predicts 1.6 percent growth this year and 1.1 percent next year, down from its June projections of 2 percent and 1.7 percent, respectively.

The gloomier forecast for Europe is based on worries that euro nations won't be able to contain their debt crisis and keep it from destabilizing the region.

"Markets have clearly become more skeptical about the ability of many countries to stabilize their public debt," Blanchard said. "Fear of the unknown is high." _APFinance_Yahoo

A closer look at Europe by a Wall Street Journal piece, reinforces the gloomy outlook for Europe's economic future:

What comes next is the explosion of the European project. Given what European leaders have made of that project over the past 30-odd years, it's not an altogether bad thing. But it will come at a massive cost. The riots of Athens will become those of Milan, Madrid and Marseilles. Parties of the fringe will gain greater sway. Border checkpoints will return. Currencies will be resurrected, then devalued. Countries will choose decay over reform. It's a long, likely parade of horribles. _WSJ

Making Europe's future appear even more dismal, is the continent's ongoing demographic collapse, and its apparent determination to commit energy suicide. Debilitating debt, demographic decline, and suicide by energy starvation....a sad outlook indeed.

Mish elaborates on the likely dissolution of the Eurozone

Greece is facing a 100% probability of default. Portugal, Ireland, Spain, and Italy are lined up in the cross-hairs.

The US is not the only nation with a corrupt, Chicago-mob style administration. But if the US stumbles under an insane load of debt and government dysfunction, the rest of the world will certainly suffer for it.

Perhaps the world deserves that blowback, given how badly the nations of the world apparently wanted Obama to be elected. But that is no reason for American voters to prolong and intensify their own agony beyond what is necessary to learn important lessons.