Richard Fisher, President of the Federal Reserve Bank of Dallas, said on Wednesday in a speech at the Bolsa Mexicana de Valores (the Mexican Stock Exchange) that, “Mexico is actually doing better than the United States in many macroeconomic areas, thanks to the soundness of its economy.”
The US Congress, and its presidential candidates, he said, should “take a chapter from Mexico’s book about implementing real fiscal reform. They might well benefit by broadening their perspective on Mexico; from focusing solely on illegal immigration and drug and gun trafficking, as important as those issues are.”
“Mexico,” he continued, “is taking the right measures to solve the microeconomic problems preventing economic growth.” Making a comparison of the two countries, he pointed out that Mexico has low levels of debt and fiscal deficit as well as a balanced budget, while the US Senate hasn’t managed to pass a budget in three years.
“Mexico’s 2011 budget deficit was 2.5 percent of its gross domestic product (GDP),” he said, “while the US’s deficit was 8.7 percent. Mexico’s national debt is about 27 percent of its GDP; the US’s debt-to-GDP ratio, on the other hand, was 99 percent in 2011, and is expected to hit 116 percent in 2012,” he said.
Fisher said that the fiscal reforms Mexico has passed in the last decade have had a significant impact, while in the US, “American politicians and policy makers have proven incapable of fiscal reform.”