Lagarde Tells U.S. to Hurry Up and Raise Debt Ceiling

The IMF chief says the issue must be resolved "immediately"

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She's not wasting any time getting settled. The newly-minted managing director of the International Monetary Fund called on U.S. legislators to show some "political courage" and raise the debt limit Tuesday. Speaking to the Council on Foreign Relations in New York, Christine Lagarde said the issue of raising the nation's $14 trillion debt ceiling before the Aug. 2 deadline "needs to be resolved immediately" because "an adverse fiscal shock in the United States could have serious spillovers on the rest of the world."

She also said a "credible fiscal adjustment plan is needed sooner rather than later" but warned legislators not to cut too much spending as that could hinder the nation's economic recovery. "The United States could be facing another jobless recovery," she said. "Again, that's why we've advised against fiscal consolidation that is unduly hasty -- even as we stress the importance of getting a fiscal consolidation plan agreed soon." She avoided laying blame on either Democrats or Republicans, who remain gridlocked on the issue. According to The Hill she also did some hailing-from-across-the-pond gloating, saying that "in addressing their own debt crisis, European leaders have shown just the type of courage the United States needs to tackle its own problems."

This article is from the archive of our partner The Wire.