The International Monetary Fund said in a report Thursday that the U.S. economy has “performed impressively over the past few years,” but now “reversing the continued increase in the public debt-to-GDP ratio is imminent.” He added that there was a “need to do so”.
“The United States is the only G20 country with GDP levels above pre-pandemic levels. This is good for the United States and for the global economy,” IMF Managing Director Kristalina Georgieva said at a press conference on Thursday. he told reporters.
He also praised the fiscal bills enacted in 2021 and 2022, saying, “This bill will have a lasting positive impact on rebuilding the American economy.” “However, through a wide range of policies such as increasing tax revenues, addressing structural imbalances in entitlement programs, and seeking savings in non-fiscal areas, we need to put public debt-to-GDP on a decisive downward trajectory. “Rights Expenditure” must be supplemented with action. ”
The IMF report warns that US budget deficits and debt pose “increasing risks to the US and global economies” and should be “urgently addressed”. The proposal calls for the government to increase the surplus excluding interest costs to about 1% of GDP, compared to the current baseline deficit of about 3% of GDP.
The United States has a number of tax and spending options to achieve this transition over several years, the IMF report says. “However,” the report states, “policy will require more than finding efficiencies in discretionary federal spending other than defense.” Policymakers will need to carefully consider increasing indirect taxes, phasing up income taxes (including for those earning less than $400,000 a year), reducing various tax expenditures, and reforming entitlement programs. Introducing these measures will require difficult political decisions to be made over several years. ”
The report adds that some of the savings from these reforms should go toward anti-poverty programs, such as reinstating Democrats’ enhanced child tax credit and expanding the earned income tax credit for childless workers. Ta.
The report also urged lawmakers to avoid the annual spending fights and debt-ceiling battles that have become so common in recent years, saying they “create completely avoidable systemic risks to the U.S. and global economies.” He called for measures to be taken.
Georgieva acknowledged at a press conference that the United States may have reason to be concerned about global fair trade, but urged U.S. policymakers to consider negotiations and options other than imposing tariffs. He said it would be costly for the United States and both countries. It will disrupt the global economy and lead to retaliation.
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