April 9, 2003 2:30 PM

The International Monetary Fund just released its World Economic Outlook. It's overwhelmingly negative. The Economist:

The Fund is particularly concerned about the Bush administration's planned fiscal stimulus. The large tax cuts envisaged could, says the IMF, be pro-cyclical - in other words, they could give the economy a boost just as it is anyway starting to pick up speed. The risk there is that inflationary pressures could build up.

But what really troubles the IMF - and it is not alone in this - is the size of the budget deficits that would result from big tax cuts. The underlying change in the balance between tax revenues and government spending, which would remain even after the economy had recovered, is bigger than in any downturn in the past 40 years, according to the IMF.

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