Tag Archive | "financial stability"

Inadequate Actions to Relieve Budget Deficits Could Undermine Global Recovery- World Finance Leaders

The United States was castigated by world finance leaders on Saturday because of its inadequate actions to lessen its large budget deficits. Finance leaders said monetary constraints in rich countries such as the United States can largely jeopardize global recovery.

On Saturday, finance ministries were in Washington for its semi-annual meeting. This time, they have discussed more about the $14 trillion debt accumulated by the United States.

Most of the emerging market economies, which took part in the meeting, criticized the actions of the United States. However, some advanced nations reinforced the talks as well.

According to Dutch finance minister Jan Kees de Jager, if advanced nations act too slowly to reduce massive financial deficits, this could further lead to more sustainability issues and weaken the outlook of global economy. He said debt dynamics in other advanced economies together with the United States are of major concern.

The International Monetary Fund said that the U.S. budget deficit was about to reach 10.8 percent of the nation’s economic output this year. The federal country ties with Ireland for the highest deficit-to-GDP ration among several other advanced economies.

The committee’s advisory panel on Saturday said that concerns for financial stability, as well as sovereign debt stability must be addressed. It said credible actions must be made to push progress.

The House of Representatives, led by the Republican party, approved a plan on Friday to cut spending by about $6 trillion over a decade and slash benefits for the poor and elderly.

President Barach Obama, who offered plans to reduce deficits by $4 trillion over 12 years, said on Thursday that the plan of the Republicans would just create a nation of potholes. The administration is worried about cutting budget spending sharply while economic recovery remains volatile.

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Layoff Notices Will Be Sent to Public Teachers of Detroit

Robert Bobb, the emergency manager of Detroit, said Thursday that he will send layoff notices to 5,466 unionized employees. This is in line with their attempt to regain the public school system’s financial stability.

Bobb which is a temporary head in the district announced that in order to match Detroit’s declining enrollment rate, he will send notices to all the members of Detroit Federation of Teachers. He added that they somehow need to reduce their number of teachers since there is also a significant decline in enrollees.

He, however, said that not all teachers will be laid off. They are just required to send the notice under the union’s current contract. 2,200 notices were also sent last year but only a portion of them were actually laid off. He assured the teachers that any layoffs will only take effect around the end of July.

The Public Act 4 says that Bobb, as the emergency financial manager, has the power to do whatever means necessary to make sure that the financial emergency in the district be resolved; even if it means they need to layoff a few teachers, and even throw away current union contracts.

Robert Bobb was appointed the position for Detroit’s schools about two years ago by Governor Jennifer Granholm after a long-standing budget deficit due to the decline in the number of enrollees per year. Since then, he has laid off workers and closed schools and yet, Detroit still faces a whooping $327 million deficit.

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