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IMF says U.S. should avoid debt limit ‘brinkmanship,’ consider replacement By Reuters

by Mike Robinson

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© Reuters. FILEPHOTO: This picture illustrates 100-dollar U.S. banknotes taken in Tokyo, August 2, 2011. REUTERS/Yuriko Nakao

WASHINGTON (Reuters) – The International Monetary Fund said on Thursday that it was important for the U.S. government should find a solution to a looming debt limit deadline to avoid “counterproductive brinkmanship” and that Washington should consider replacing the federal borrowing cap.

Gerry Rice, an IMF spokesperson, stated that alternatives should be considered by the United States such as an automatic adjustment mechanism and a clear medium-term fiscal goal. The limit can be raised or suspended by Congress through legislative action.

Janet Yellen (U.S. Treasury secretary) has warned the federal government that it will run out of cash and borrow capacity in October under unusual debt measures, making it unable for all payments.

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