IMF chief Christine Lagarde to US: Don’t ignore the fiscal cliff

Updated
 

Christine Lagarde, the head of International Monetary Fund (IMF), offered a bit of advice to U.S. politicians deadlocked on the country’s budget: don’t ignore the fiscal cliff.

“If I were to give a piece of very humble and modest advice,” the Frenchwoman began during an interview with Andrea Mitchell, “It would be, ‘Focus on the very dear of consequences that could result from the fiscal cliff.’ [It would] actually result in 4% deficit reduction, so part good news, but very bad news—contraction of about 2% of the U.S. GDP, which brings the U.S. growth to zero. This is something that is very, very serious.”

The “fiscal cliff” is used to describe the set of automatic tax increases and spending cuts that will occur if Congress and the White House fail to reach an agreement on the federal budget before the end of this year.

Lagarde made similar remarks urging the United States to action while speaking in Washington Monday at the Peterson Institute for International Economics.

She also called on global leaders, including in Europe and the United States, to learn to better compromise in order to avoid “more crisis to come.”

“I would hope decision-makers can actually come to terms to show a spirit of compromise in order to avoid yet another crisis,” Lagarde told Mitchell. “I think we all have had enough of the crises in the last few years. Everybody is looking for something that is better for households, better for enterprises, and better for people.”

 

Lagarde is the first woman to lead the IMF and she is doing so during a period of not-so-inconsequential nor easy economic times. She stepped into the IMF’s top position last year after the previous chief, Dominique Strauss-Kahn, departed amid allegations of sexual misconduct.

Seemingly reluctant to be identified as a pioneer, though, Lagarde, said: “I have to do my job like everyone else. Let’s face it. If I can bring a different dimension to the table the better because I think differences actually take us further.”

She did weigh in on an ongoing conversation among professional women, particularly in political circles, as to whether women truly can “have it all,” i.e., both professional and personal success. It was sparked by an article in The Atlantic, “Why Women Still Can’t Have It All,” by Anne-Marie Slaughter, a former U.S. State Department official.

“I think you cannot have it all at the same time. I think you can have it all in a way as long as you can afford to be patient and not have it all at the same time,” said Lagarde, also a divorced mother of two grown sons. “You also have to accept that there will be failures, delay along the way, and be reasonable with it. This concept that you could have it all at the same time—have your kids, be a super professional, be a perfect mother, a perfect spouse, be beautiful and socially accepted—this just doesn’t work. It’s a matter of managing time. Managing your own expectations, managing expectations that others have about you and for you.”

Fiscal Cliff

IMF chief Christine Lagarde to US: Don't ignore the fiscal cliff

Updated