by Romina Boccia
The Heritage Foundation
July 02, 2014
The International Monetary Fund (IMF) is focusing on immediate spending and tax increases to relieve the United States’ fiscal policy woes, when they ought to focus on the looming entitlement spending crisis. In this sense, the IMF is marching in lock-step with the Obama Administration. IMF’s report on its 2014 Article IV Consultation with the United States risks encouraging inaction by U.S. lawmakers on adopting structural entitlement reforms to control spending and debt growth. As recently as 2011, the IMF warned that the U.S. lacks a “credible strategy” to stabilize its mounting public debt. Three years later, the U.S. still lacks a credible action plan to prevent public debt from growing far beyond the size of its GDP. Such a strategy begins with putting entitlement spending on a more sustainable long-term path, particularly by reforming health care and retirement programs for the elderly. Instead of singing to the tune of the Obama Administration, the IMF should go back to the drawing board to identify budget reforms that will curb U.S. spending and debt.



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