U.S. Fiscal Cliff Threatens Growth, IMF’s Cottarelli Says

International Monetary Fund official Carlo Cottarelli said the U.S. needs a medium-term plan to reduce its budget deficit as the danger of the biggest fiscal tightening in more than six decades threatens economic growth.

“Without additional support, there will be a fiscal tightening next year of about 4 percent of GDP, which is the largest adjustment seen on record since, I believe, 1947,” Cottarelli, director of the IMF’s fiscal affairs department, said in an interview with Bloomberg Television’s Sara Eisen in Tokyo today. “This will be very negative and very bad for the U.S. economy.”