IMF chief Lagarde: Global economy losing momentum

Despite her calls, there appears little near-term prospect of pro-growth reforms, and yet more government debt and spending is highly unlikely to be restricted to building out productive public infrastructure.

I need to brush up on my initials...I saw IMF and thought of the Tom Cruise movies.

The IMF's main "business" is predatory lending to third world countries. Force loans on them that they can't possibly ever pay back, and then force austerity on them that will further impoverish their citizens.

Truly an evil organization.

For the IMF, and most governments issuing fiat money, "take action" typically means "dilute and inflate the currency even more".

"and then force austerity on them that will further impoverish their citizens."

You're right, but they used to do that. They've stopped, after they and their minions learned the hard way that austerity is toxic for economies with low private demand.

The IMF top economist even said outright that it tragically understated the damage that spending cuts can inflict on such an economy. And the scary thing is: there are people calling for the same prescription for Japan!

"Austerity is much worse than we thought." https://www.washingtonpost.com/news/wonk/wp/2012/10/12/imf-austerity-is-much-worse-for-the-economy-than-we-thought/

As if Lagarde could even find her way out of a paper bag without a consortium of advisors. Who listens to that socialist windbag?

Years of stimulus and no growth in Japan - if more stimulus were the answer here it would have worked by now. Hints in JeffLee's own article as to why it mightn't be expected to help in Japan. Japan is basically at full employment already.

But these crazies never think the medicine is wrong despite never getting better.

Thanks for the insight Lagarde, must be hell to take a break from having your snout in the trough.

@fxgai

"if more stimulus were the answer here it would have worked by now"

It clearly worked in the US (and it was working in Japan in the leadup to the tax hike). The US economy is now clearly ahead of the pack, propelled by a lot of Obama/QE Fed stimulus.

The difference in the US was the policies were not undercut by a hike in everyone's taxes...as happened in Japan. And that Japanese move was austerity oriented. Austerity is a growth killer. How obvious is that?

There IS no austerity in Japan - the government spends 90 - 100 trillion yen a year versus 50 - 60 trillion yen of tax revenues.

Japan has done more stimulus than anywhere and that's why public debt has blown out to 2.5 times GDP, double virtually anywhere.

And for all the stimulus, only crappy growth rates to show for it, for years. (The only saving grace is that a complete financial meltdown hasn't yet occurred.)

So obviously... Japan just needs to do double or triple the world-leading stimulus that they have done until now! It's bound to work, and Japan will no longer be at the end of the pack!!

"There IS no austerity in Japan...."

Yes there is. What do you call the Health Ministry's official policy on healthcare of "cost containment." Look it up.

When Japanese policymakers say tax hikes (that actually take place) are needed for "fiscal consolidation," what do you call that?

The 40 trillion yen deficits don't lie.

Making it 35 trillion deficit (via tax hike or spending cut) is like a sumo wrestler eating a few slices less yakiniku.

The last six months have seen manufacturing in the US decline 16 consecutive quarters, ( not seen outside a recession), food stamps spiking up, debt spiking, and the amount of part time low paying jobs increasing dramatically. Yea, and Obama says, just believe, hope and change, believe, and you'll feel a lot better.