So says the IMF, in its latest paper on Exit Strategies from the current financial crisis.
The IMF’s chief economist puts it bluntly: “Notwithstanding the recent pick-up in growth momentum, there is little evidence as yet that private demand is self-sustaining. Hence, fiscal and monetary stimulus may need to be maintained well into 2010, although if developments proceed as expected, withdrawal could begin in 2011.”
Developments so far have not proceeded as expected: growth in the US, Japan, and Europe is anemic, unemployment remains very high, and government stimulus packages have not been sufficiently large.
US politicians and Helicopter Ben hopefully will read this paper, and get serious about economic development and unemployment.
It’s very unlikely that anything other than a minor jobless recovery is on the cards before 2012, and it’s quite possible there will be a double dip recession.
Puny jobs bills, phony inflation fights, and fetishizing the deficit are not the solutions of people who claim to be leaders.
Gorilla thinks: “Put the deficit at bay and give us WPA!”
