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-- -- says that while the US economic recovery looks good for my housing standpoint it is worried about the continuing strength of the economy.
It is brand new report out today the IMF says federal budget cuts are coming to -- and -- slowing the pace of the recovery.
A very honest -- and sat down for an exclusive interview with IMF managing director Christine like -- she joins us now live from Washington DC was.
Well actually specifically it's the sequester those automatic spending cuts that kicked in this year.
That -- everything from defense to education to infrastructure spending and it's those cuts that have Christine Lagarde worried that in -- second half of 2013.
We might see the recovery stumble here in the US it's lately felt like we made it through the sequester -- right we've heard a lot of people on your show.
All day long for Fox Business -- the past couple months say.
Boy that was a dodge bullet but not -- look guard here's why she's concerned she tells us -- a Fox Business explosive.
I think a lot of people thought -- -- restoration was ill designed and I think -- just put in place precisely to be avoided.
So what -- is saying not -- slow down.
But hurry up.
What do I mean slowdown does not need to -- -- The deficit by two and a half percent it's it's very heavy.
On growth and -- -- in -- by about one point 5% may be a little bit more particularly if it if it picks up.
In his second.
Second quarter -- 2013.
We'll also saying hurry -- Because they are long term measures but we'll be critical for the US economy.
That needs to be taken now particularly concerning entitlement.
So what was really the way.
That we engendered those cuts that she didn't like that she's concerned about.
And feels actually and Tracy that that they might really cause us to stumble just a bit at the end of 2013 and that's why the IMF.
Has downgraded by about three tenths of a percentage point their expectation for GDP in 2014.
Which by the way is still a two point 7% better than this year.
That's true but -- you know -- -- plus -- god has been very upfront with -- about how important it is to cut the deficit.
So I guess the question what does she think we should be trimming if not walked Scott -- in the sequester.
Right a lot of -- Listen we'll talk of that -- cut something else I did ask her specifically she said that health care spending.
Is really going to hit public finances and she feels that we are on an unsustainable path when it comes to -- and Social Security of course this is nothing that we haven't heard.
From a lot of lawmakers who then refused to do anything about it in the short term she says.
We will see a better economy that'll increase revenues that will improve our deficit cutting situation but it is the long term outlook.
A very high health care costs and very high Social Security funds.
That's the problem she feels really needs to be addressed and that is something of course we all know and understand.
Very -- as we appreciate it what do you got coming up.
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