The International Monetary Fund warned on Monday the United States must raise the debt ceiling quickly and get its debts under control for the sake of the global economy. The IMF made the appeal as part of a review of US economic prospects in which it concluded a slow-paced recovery can continue with some fiscal tightening but stressed that public debts were a concern.
"Directors (on the IMF board) highlighted the urgency of raising the federal debt ceiling and agreeing on the specifics of a comprehensive medium-term consolidation program," the IMF said as efforts continued between the Obama administration and lawmakers to craft some plan to avoid a potential US debt default. With an August 2 deadline approaching, after which the United States may not be able to issue more debt, lawmakers have so far refused to compromise on a plan to raise the $14.3-trillion legal borrowing limit and come to grips with spending and tax issues. The IMF said some action to get debts under control must start in fiscal 2012, which begins on October 1, or the United States will face a disruptive loss of credibility.
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