IMF Says Fiscal Uncertainty Damages U.S. Economy

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Recent findings by the International Monetary Fund (IMF) criticized U.S. officials for the state of American fiscal policy, calling it “dysfunctional” and on “an unsustainable path.”  

In a preliminary report on the U.S. economy, IMF staff pointed to a myriad of budget challenges that have largely gone unaddressed.

“The inability of the Congress and the executive branch to collectively pass a budget and corresponding appropriations bills creates a level of fiscal uncertainty that is damaging to the U.S. economy,” the report said.

It expressed concern about the possibility of a government shutdown over the federal debt limit, which needs to be raised this fall. The report also highlights the Highway Trust Fund, which is projected to run out of money in late July.

The report’s recommendations include: 



  • Simplify the income tax system. 
  • Raise federal motor fuels taxes to pay for infrastructure investment.
  • Stabilize Social Security finances by gradually increasing the retirement age, raising the maximum earnings for payroll taxes and switching to “chained CPI,” an alternative to the current measure of inflation that appears to be more accurate.  
  • Increase care coordination for patients with chronic conditions and curb the overuse of expensive procedures.

External links:
IMF Report on U.S. Outlook

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