The International Monetary Fund is cutting their estimates for global growth in general, and the U.S.’s growth prospects in particular:
Their advice to us: “The top priorities in the United States include devising a medium-term fiscal consolidation plan to put public debt on a sustainable path and to implement policies to sustain the recovery, including by easing the adjustment in the housing and labor markets. The new American Jobs Act would provide needed short-term support to the economy, but it must be flanked with a strong medium-term fiscal plan that raises revenues and contains the growth of entitlement spending.”
The likelihood we will follow their advice and pass the AJA now and a balanced plan for deficit reduction later? Well, I wouldn’t bet on it.