The US economy is enjoying a growth spurt that will not last beyond this year because it is driven by military spending and tax cuts while the George W. Bush administration turns a blind eye to a looming deficit crisis, American economists said in Havana on Monday. \n"Developing countries that still rely on the American market as an engine of growth should be cautious about expecting too much after 2004," said University of Texas professor James Galbraith at an annual economists conference on globalization issues hosted by Cuba. \nEconomic Nobel laureate Daniel McFadden warned that the US was heading toward a generational demographic crisis in social security and Medicare that will require government funding, and in turn imply unsustainable deficits. \n"The current administration in Washington is making no serious effort to deal with the looming failure of its programs," McFadden said in a lecture to 1,300 economists from 43 countries. \n"There is a high risk that social and financial turmoil will result, threatening the continued prosperity of the US economy and the stability of the globalized markets in which it is a key player," he said. \nGalbraith said the current "spurt of growth" in the US economy was kicked off by the increase in military spending for the Iraq war and sustained over the summer by an infusion of cash into household spending. \n"We are going to see another such infusion in the second quarter, so it is not over yet," he said, but added that future tax cuts will not add to household spending and that a slowdown is predictable. \nGalbraith, son of Harvard economist John Kenneth Galbraith, said the Bush administration ran policies designed to make the economy stronger in the short run, such as child credits and last year's tax cuts, to enhance its chances in this year's elections. \nWhile the Federal Reserve said it can be patient before it raises very low interest rates, it will come under pressure to defend the dollar through higher rates, he said. \n"Whether they yield to that pressure is more a question of when than if. I would not be at all surprised to see interest rates rising next year and that will cause further problems," Galbraith said. \nMcFadden won the Nobel Prize in 2000 with James Heckman, who also attended the Havana conference, for developing econometric theories and methods widely used in the statistical analysis of individual and household behavior. \nMcFadden said the unregulated flow of speculative "hot money" had created global financial volatility and burdened developing nations with unpayable debt and attacks on national currencies. \nThe support provided to nations in difficulties by the International Monetary Fund is often "cold comfort" due to painful austerity demanded in return for bailouts. \n"We need to cool down hot money, keeping long term flows while reducing short term volatility, and warm up the cold comfort currently provided by the IMF to countries that are in trouble," he said.
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BRIBERY CASE: President Tsai Ing-wen accepted Su Jia-chyuan’s resignation as he said that he deeply regretted causing trouble for the president due to the investigation Presidential Office Secretary-General Su Jia-chyuan (蘇嘉全) yesterday resigned after his nephew, Democratic Progressive Party (DPP) Legislator Su Chen-ching (蘇震清), was implicated in a bribery case related to a dispute over the ownership of Pacific Sogo Department Store (太平洋崇光百貨). “I resigned from the post so that President Tsai Ing-wen (蔡英文) would not be bothered by it anymore, and the prosecutors can investigate the case in a fair and just manner. I thank President Tsai once again for supporting me. May the country continue to prosper under her leadership,” Su Jia-chyuan said in a statement. The Presidential Office said that Tsai has accepted
ALEX AZAR: The first visit by a head of the Department of Health and Human Services would strictly observe the CECC’s special regulations, the Ministry of Foreign Affairs said US Secretary of Health and Human Services (HHS) Alex Azar is to lead a delegation to Taiwan — the highest-level visit by a US Cabinet official since the two sides cut formal relations in 1979. The plan was announced yesterday morning by the US Department of Health and Human Services and confirmed by the Ministry of Foreign Affairs (MOFA). Beijing has expressed its concerns to Washington, Chinese Ministry of Foreign Affairs spokesman Wang Wenbin (汪文斌) said later yesterday. Taiwan and the US only issued statements saying that the visit would happen “in the coming days.” MOFA said that due to security concerns, it would
The military last week sent “no small number” of Marine Corps officers to the Pratas Islands (Dongsha Island, 東沙群島) following reports of a Chinese People’s Liberation Army (PLA) drill targeting the islands scheduled for this month. In an interview with Hong Kong’s Bauhinia Magazine published on Saturday last week, PLA National Defense University professor Li Daguang (李大光) confirmed that the Chinese army was planning to stage a simulated invasion of the Pratas Islands in the South China Sea this month. The islands comprise three atolls, with Pratas Island, at 1.74km2, being the largest. They lie southwest of Taiwan proper in the South