This is Bob Doughty with the VOA Special English EconomicsReport.

A new report warns that the rising United States budget deficitand trade imbalance threaten world economic security and growth. TheInternational Monetary Fund released the report last week. The Bushadministration says tax cuts have helped economic recovery, anddeficit cuts are planned.

Charles Collyns was among several I-M-F officials who researchedand wrote the report. Mister Collyns notes that the federalfinancial balance has changed in the last few years. He says thetwo-thousand budget year had a surplus of two-and-one-half percentof the gross domestic product. That is the total value of goods andservices produced in the country. But in fiscal yeartwo-thousand-three the budget had a deficit of almost four percentof the gross domestic product.

Mister Collyns says additional spending gave immediate and muchneeded support to the American economy. But he says there arelong-term problems if large federal deficits continue. The I-M-Fteam says budget estimates show large deficits for the next tenfiscal years.

The report says these deficits would lead the United States toborrow more money. It says foreign debt could equal forty percent ofthe economy in a few years. This would be a record level for a largeindustrial nation.

The I-M-F says growing debt and increased borrowing may forceinternational loan rates to rise. It says this would restrainprivate investment, especially in the purchase of government bonds.Mister Collyns says this process is already happening. He says it ispartly to blame for the fall in the value of the American dollarduring the last year.

The I-M-F experts say the result in the end is lower worldwideproductivity and earnings growth. The report says the Americangovernment must raise taxes and limit spending to avoid this.

Administration officials noted that President Bush has alreadysaid he will work to reduce the deficit by half during the next fiveyears.

Mister Bush spoke about the economy in his weekly radio messagelast Saturday. He said business investment has increased and theunemployment rate is falling. He said American stock market wealthincreased in the past year. And he again called on Congress to makehis tax cuts for Americans permanent.

This VOA Special English Economics Report was written by CatyWeaver. This is Bob Doughty.