IMF chief says U.S. needs blend of spending cuts, revenue raising | ReutersThe United States needs a balanced, comprehensive approach to tackle its fiscal woes that should include a mix of spending cuts and revenue increases, the head of the International Monetary Fund said on Sunday.
"My view, personally, is that the best way to go forward is to have a balanced approach that takes into account both increasing the revenue, which means, you know, either raising taxes or creating new sources of revenue, and cutting spending," IMF Managing Director Christine Lagarde said in a pre-taped interview on CNN's "State of the Union," which aired on Sunday.
Hopefully, the IMF Director-General's perspective will carry some weight in Washington. If the fiscal cliff situation is to be resolved in an effective manner and, more importantly, if the U.S. is to develop a credible and effective fiscal consolidation strategy, Washington's policy makers will need to focus on pragmatic realities. They will need to do so even if it requires them to give greater weight to best practices (and there are examples of successful fiscal consolidation efforts available in the international experience) than entrenched ideology or ideologically-driven assumptions.