APR 18, 2018
Before the rest of the article, let’s take a moment to reflect on this bit of wishful thinking from the IMF:
“Decisive action is needed now to strengthen fiscal buffers, taking full advantage of the cyclical upswing in economic activity,” the fund said.
“It is important to note that building buffers now will help protect the economy, both by creating room for fiscal policy to step in to support economic activity during a downturn and by reducing the risk of financing difficulties if global financial conditions tighten suddenly.”
Translated, this says “Current politicians, provide less to your voters now, while you take more from them in taxes, to pay for the empty promises of the politicians that came before you, so you can get voted out of office in favor of someone who will make those same empty promises again.”
Our political systems drive our economic systems. This is backwards, and true, and ultimately catastrophic. That the IMF gets on its little ivory tower soapbox to do some sermonizing and finger-wagging from time to time amounts to an eyedropper of pabulum in a toxic ocean of worldwide, debt-addict-nation reality.
The global economy is more deeply indebted than before the financial crisis and countries need to take immediate action to improve their finances before the next downturn, the International Monetary Fund has said.
The IMF said a prolonged period of low interest rates had stimulated a build-up of debt worth 225% of world GDP in 2016, 12 points above the previous record level reached in 2009.
China was responsible for much of the increase, the IMF said, but noted that developed, emerging market and low-income countries all now looked vulnerable.
The Washington-based institution used its half-yearly fiscal monitor to single out the US for particular criticism, saying that Donald Trump’s fiscal stimulus – a package of tax cuts and spending increases – was leading to a bigger budget deficit at a time when it should be on the way down.
ORIGINAL SOURCE: Global debt now worse than before financial crisis, says IMF by Larry Elliott at The Guardian on 4/18/18