IMF Tells USA to Begin Austerity

WASHINGTON (AFP) – The International Monetary Fund on Thursday urged the United States to rein in its ballooning budget deficit without putting the "modest" economic recovery at risk.
"The central challenge is to develop a credible fiscal strategy to ensure that public debt is put -- and is seen to be put -- on a sustainable path without putting the recovery in jeopardy," the IMF said in a report.
Amid jitters that high levels of unemployment may force a double dip recession, the IMF warned the slow recovery would continue.
"While still modest by historical standards, the recovery has proved stronger than we had earlier expected.
"The outlook has improved in tandem with the recovery, but remaining household and financial balance sheet weaknesses -- along with elevated unemployment -- are likely to continue to restrain private spending."

The Washington-based lender said that despite the continued economic woes, the United States should move to put its budget in order.
President Barack Obama has plowed nearly a trillion dollars into the economy to spur economic growth, exploding the US deficit.
The IMF praised US efforts to cut the long-term deficit through health system reform, but said more needed to be done.
"The authorities' commitment to halve the budget deficit by 2013, and intention to stabilize public debt at just over 70 percent of GDP by 2015 are welcome, although much remains to be done to achieve these aims."
At a recent summit of the Group of 20 leading economies in Toronto, the Obama vowed to halve the deficit within three years.
But the IMF projects that the deficit will stand at 64 percent of gross domestic product this year, rising to just over 96 percent by 2020.