Lagarde warns of dangers of excess austerity
03 April 2012 17:09
IMF Chief Christine Lagarde has stressed the importance to the global economy of strong U.S. economic leadership and warned of the dangers too much austerity to the worldwide.
In a speech to journalists in Washington Ms Lagarde said that "a global undifferentiated rush to austerity will prove self defeating," and that "countries like the United States with low costs of borrowing should not move too quickly."
she cautioned about complacency regarding U.S. public debt, and urged a stronger push to curb the growth of entitlement spending and raise more revenue. More action is also needed in the United States to ease the burden of household debt, which she said is holding back the recovery.
Ms Lagarde also stressed that for the IMF to continue to be effective, it needed more financial resources.
“Now that the Europeans have moved first with their firewall, the time has come to increase our firepower,” she said.
Noting that over 200 million people globally, including nearly 13 million in the U.S., are without work, she said, “jobs must be a priority.”