Lagarde slams US over debt

Julian Harris
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INTERNATIONAL Monetary Fund (IMF) chief Christine Lagarde last night hit out at American politicians for failing to manage their country’s debt ceiling.

“The US is not doing as well as it could be, because of self-inflicted fiscal wounds,” Lagarde said, in a speech in Washington DC.

Automatic spending cuts, which kicked in through a process known as sequestration, are damaging the recovery, she added.

“[Sequestration] also an extremely blunt instrument, imposing deep cuts in many vital programmes... while leaving untouched the key drivers of long-term spending.”

While limiting cuts in the short run, the US must rein back its deficit in upcoming years, Lagarde added.