Kristalina Georgieva looked at Scott Bessent's growth plan for the United States and said no. Not good enough. Won't work. The deficit sits there. The $40 trillion debt pile sits there. Bessent thinks growth fixes it. Georgieva thinks fiscal consolidation fixes it. One of them gets paid to be right about this stuff and it's not the one selling hope.
Bessent serves as Treasury Secretary. His job involves convincing people that economic growth will solve a math problem. The math problem is that the United States spends more money than it collects and has done so for decades. Growth helps. Growth does not help enough. This is not controversial among people who count things for a living.
The IMF exists to tell countries their fiscal plans are dog sh*t. Georgieva runs the IMF. She told Bessent his fiscal plan is dog sh*t. He relied on growth projections. She replied with fiscal consolidation requirements. This is the geopolitical equivalent of your friend saying he'll pay you back once his screenplay sells and you saying he needs to get a second job at Wendy's.
Retail traders heard this news and immediately began trading Treasury futures based on vibes. Some guy in Michigan with a Robinhood account saw the headline and thought this means rates go up. Another guy in Florida thought it means rates go down. Both of them lost money. Neither of them knew what fiscal consolidation meant before Googling it thirty seconds ago.
The deficit does not care about growth plans. The deficit cares about revenue minus spending. Bessent can project 4% GDP growth until his face turns blue. If spending outpaces revenue the debt grows. This is addition and subtraction. The IMF chief pointed this out. She might as well have pointed out that water is wet.
Bessent will now spend six months explaining why the IMF is wrong about basic arithmetic while the debt pile grows to $41 trillion.
Photo by Jorge Maya on Unsplash
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