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The IMF said the the quiet part out loud today (admittedly wrapped in 100s of pages of PhD-ese) in their benchmark Fiscal Monitor this morning: pointing out that America's recent economic performance is partially the result of the country's unsustainable borrowing, and that the US' massive fiscal deficits have stoked inflation and pose "significant risks" for the global economy.

The IMF said the US had exhibited “remarkably large fiscal slippages”, with the fiscal deficit hitting 8.8 per cent of GDP last year – more than double the 4.1 per cent deficit figure recorded for 2022, calculating that 'Bidenomics' (and its Inflation Reduction Act) had contributed 0.5 percentage points to core inflation (due to its fiscal profligacy).

Who could have seen that coming?

The fund further said in its Fiscal Monitor report that it expected the US to record a deficit of 7.1 per cent next year – more than three times the average for other advanced economies. It also raised concerns over Chinese government debt as Beijing copes with weak demand and a housing crisis.

The US and China were among four countries the fund named that "critically need to take policy action to address fundamental imbalances between spending and revenues."

The others were the UK and Italy.

Rampant spending by the US and China in particular could "have profound effects for the global economy and pose significant risks for baseline fiscal projections in other economies," the IMF said.

Furthermore, The IMF (rather too honestly) noted that things could get even worse as it's a massive election year and politicans like to spend money they don't have to buy votes (well, that's our translation of their findings that deficits in election years tend to exceed forecasts by 0.4 percentage points of GDP, compared to non-election years).

Finally, we note that IMF chief economist Pierre-Olivier Gourinchas warned that the US's fiscal position was "of particular concern", suggesting it could complicate the Fed's attempts to return inflation to its 2% goal.

"Something" indeed, Monsieur!