United States need a balanced and comprehensive approach, to meet their fiscal problems, an approach that should include a mix of spending cuts and revenue increase, said Sunday Christine Lagarde the Managing General of the International Monetary Fund (IMF), according to Reuters.
“The best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means raising tax or creating new sources of revenue, and cutting spending as well,”
said Christine Lagarde in an interview with CNN for the show “State of the Nation”, aired yesterday.
IMF chief expressed her opinions about the fiscal cliff that Washington is facing, a combination of automatic spending cuts and tax increases that will be in place simultaneously at the beginning of 2013 if the members of Congress will not reach an agreement .
In her interview given to CNN, Christine Lagarde said that the fiscal cliff is the biggest threat to the U.S. economy, as the country is more vulnerable to its internal problems than to anything else happening in the eurozone and in China.
U.S. economy “is less vulnerable to what happens outside, for instance in Europe,” said Christine Lagarde.
“I’m not saying that there will be no consequences out of a crisis that could happen in Europe. But the consequences would be relatively minor…It is more exposed to its own difficulties and to its own issues than to what happens elsewhere in the world, because it is such a large player,”
she added.
Christine Lagarde told CNN that she remains optimistic about the fact that members of Congress will reach a compromise before the deadline:
“My confidence is deeply rooted in the affection that I have for the United States… I believe that there is a sense of being practical, addressing the issues rather than, you know, dancing around and avoiding issues,”
IMF chief added.
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