According to IMF latest survey on the U.S. economy:
-U.S. GDP growth is expected to slow to 1.9%
-the recovery depends on a more balanced and gradual fiscal adjustment.
-the tapering of the accomodative monetary policy requires careful
communication and timing.
''The main policy challenge is to support the recovery, while addressing the vulnerabilities that threaten growth, public finances, and financial stability in the medium term.
• Repeal the sequester and adopt a more balanced and gradual pace of fiscal consolidation. The spending cuts not only reduce growth in the short term, but the arbitrary reductions in education, science, and infrastructure spending could also reduce medium-term potential growth.
• Raise the debt ceiling to avoid a severe shock to the United States and the global economy.
• Adopt a comprehensive set of measures to restore long-run fiscal sustainability.
Spending on major health care programs and Social Security is expected to increase by 2 percentage points of GDP over the next decade. Interest outlays are also projected to increase by 2 percentage points of GDP over the same period, as interest rates gradually return to normal levels. These factors would again widen the budget deficit and increase public debt. The IMF suggests that New revenues could be raised through a reduction in tax exemptions and deductions,as well as through the introduction of a carbon tax and a value added tax''. Measures
that have been rejected by the Republican Party.
''Spending measures would need to curb the growth in public health care and pension outlays''.
Curbing spending in health care and pension outlays is not in the Agenda of Mr Obama and
the Democratic Party.
These measures have been the origin of the political gridlock for the past months, is there
any reason to believe that things will change?,and that the IMF will dictate the political agenda
of the U.S.?
-U.S. GDP growth is expected to slow to 1.9%
-the recovery depends on a more balanced and gradual fiscal adjustment.
-the tapering of the accomodative monetary policy requires careful
communication and timing.
''The main policy challenge is to support the recovery, while addressing the vulnerabilities that threaten growth, public finances, and financial stability in the medium term.
• Repeal the sequester and adopt a more balanced and gradual pace of fiscal consolidation. The spending cuts not only reduce growth in the short term, but the arbitrary reductions in education, science, and infrastructure spending could also reduce medium-term potential growth.
• Raise the debt ceiling to avoid a severe shock to the United States and the global economy.
• Adopt a comprehensive set of measures to restore long-run fiscal sustainability.
Spending on major health care programs and Social Security is expected to increase by 2 percentage points of GDP over the next decade. Interest outlays are also projected to increase by 2 percentage points of GDP over the same period, as interest rates gradually return to normal levels. These factors would again widen the budget deficit and increase public debt. The IMF suggests that New revenues could be raised through a reduction in tax exemptions and deductions,as well as through the introduction of a carbon tax and a value added tax''. Measures
that have been rejected by the Republican Party.
''Spending measures would need to curb the growth in public health care and pension outlays''.
Curbing spending in health care and pension outlays is not in the Agenda of Mr Obama and
the Democratic Party.
These measures have been the origin of the political gridlock for the past months, is there
any reason to believe that things will change?,and that the IMF will dictate the political agenda
of the U.S.?
''The IMF also stressed the crucial importance of monetary policy. “Unusual times demand unusual policies and unusual care in managing risks,” said Lagarde.
Given the still-large output gap, there is no need to rush to exit from monetary accommodation. But the IMF underscored the need to plan and manage a gradual and orderly normalization of monetary policy conditions, while monitoring financial stability risks''.
