IMF Review of US economy “On the fiscal front, the deficit reduction in 2013 has been excessively rapid and ill-designed,” the review says. “In particular, the automatic spending cuts (“sequester”) not only exert a heavy toll on growth in the short term, but the indiscriminate reductions in education, science, and infrastructure spending could also reduce medium-term potential growth.” - And the fund’s economists make no bones about their preference for something along the lines of President Obama’s proposed budget. “These cuts should be replaced with a back-loaded mix of entitlement savings and new revenues, along the lines of the Administration’s budget proposal.” - ““There are signs that the U.S. recovery is gaining ground and becoming more durable,” Lagarde said. “However, it has a way to go before returning to full strength. The IMF’s advice is to slow down, but hurry up: meaning slow the fiscal adjustment this year — which would help sustain growth and job creation — but hurry up with putting in place a medium-term road map to restore long-run fiscal sustainability,”
Posted on: Fri, 14 Jun 2013 22:16:27 +0000
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