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United States: A Need to Bridge the Political Divide

A political consensus must be formed to address the medium- to long-term fiscal challenges. Harsh austerity measures are neither needed nor welcomed. The key is to constrain growth in outlays below revenue growth, which does entail reforming entitlement programs. However, policy makers should also support productivity-driven, long-term growth measures since this helps to more quickly and easily lower the debt/GDP ratio.

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