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Soaring U.S. debt poses risks to global economy, IMF warns

U.S. government budget deficits and an escalating debt load pose “a growing risk” to the global economy, marring an otherwise stellar economic performance, the International Monetary Fund said on Thursday.

The United States over the next several years faces “a pressing need” to reduce its debt burden, which could require broad-based income tax increases and cuts in popular entitlement programs, the fund said at the conclusion of its annual review of the U.S. economy.

The required fiscal adjustment will mean “difficult political decisions over the course of multiple years,” the fund said, warning that an unchecked rise in debt could eventually sap U.S. growth and snowball into global financial distress.

“Now is a good time,” said Kristalina Georgieva, the fund’s managing director. “The U.S. economy is very strong, and it is in good times where you can do more to…

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