WASHINGTON (AP) — The United States must work harder to reduce its enormous national debt, the International Monetary Fund has ruled. If fiscal policy continues on the same path as it is now, government debt will rise to 140 percent of the size of the economy in eight years. That could put both the U.S. economy and the global economy at risk, according to the Financial Stability Facility.
To combat budget deficits, future U.S. governments must raise taxes and control spending. Taxes should also be increased for households with incomes below 400,000, according to a recent IMF delegation to the United States. President Joe Biden, who has announced higher taxes on big corporations and wealthier Americans, has previously promised to save the group.
Last year, US government debt rose to nearly 121 percent of GDP. According to the IMF, it would help if some long-standing tax incentives were abolished, such as a tax credit for employers who provide health insurance to their employees. Taxes on corporations will also have to increase, and as the U.S. population ages, it’s better to keep health care costs under control.
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