This post was written by Hatchet reporter Gloriana Sojo.
The leader of the International Monetary Fund warned Thursday of severe global consequences if Congress fails to pass a budget or raise the debt ceiling.
Speaking two days after the U.S. government was shut down, Christine Lagarde told an audience of GW students and professors that the congressional inaction could throw the U.S. economy off course.
“The government shutdown is bad enough,” Lagarde said. “But failure to raise the debt ceiling would be far worse, and could very seriously damage not only the U.S. economy, but also the entire global economy.
Lagarde, who is also the first female head of the IMF, said raising the debt ceiling was “mission-critical.”
The former French finance minister added that international institutions like the IMF should play a key role as countries rebound from the global financial crisis. Specifically, those global powerhouses can help emerging economies like China, Brazil and India shape policies to boost their growth rates.
James Foster, a professor of economics and international affairs, said Lagarde’s remarks about international cooperation highlighted the tone of the economic recovery.
“There is a strong feeling of hope, that there is a new way of doing things, that transitions are actually coming to fruition, and that here is a chance to resolve problems,” Foster said.
She also thanked the University and students for hosting the IMF’s annual meetings, which will kick off on Tuesday.