Participants of the World Economic Forum in Davos, Switzerland, have voiced disapproval of US President Barack B.O.Obama's State of the Union address on curbing the US deficit.
Hours after Obama used his State of the Union address to propose a partial freeze on government spending, delegates at the conference in Davos said the US is lagging behind foreign counterparts in cutting a budget deficit of more than USD 1.2 trillion.
"We need a heck of a lot more action on it; [Obama's speech] lacked details," James Turley, CEO of Ernst & Young LLP noted.
The US failure to control the deficit that Obama called unsustainable was one of the biggest risks to the global economic growth, said Nouriel Roubini, chairman and founder of the New York-based Roubini Global Economics LLC and a Davos veteran, Business Week reported.
While acknowledging that the US deficit was "not sustainable," Obama proposed bare minimal countermeasures.
"I am proposing that starting this year, we freeze annual domestic spending for the next five years. This would reduce the deficit by more than USD 400 billion over the next decade and will bring discretionary spending to the lowest share of our economy since Dwight Eisenhower was president," Obama said.
The US budget deficit, which exceeds 11 percent of the gross domestic product, is almost double the 6.5 percent average for the euro region, according to the International Monetary Fund.
Forty-three percent of respondents in this month's Bloomberg Global Poll said there is a moderate risk the US budget deficit will provoke a crisis of confidence in the next two years, a condition that sparks a surge in long-term interest rates.