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IMF: Must Have More Stimulus Spending

From an elated Reuters:

International Monetary and Financial Committee (IMFC) Chairman Youssef Boutros-Ghali (L), U.S. Treasury Secretary Timothy Geithner (C) and Canada’s Finance Minister Jim Flaherty talk during a break at the G8 finance ministers’ meeting in Lecce June 12, 2009.

IMF says worst not over

Mon Jun 15, 2009

By Mike Peacock

LONDON (Reuters) – The head of the IMF questioned on Monday debate about when to roll back stimulus spending, saying the world economy had yet to weather the worst of a recession that claimed a record number of European jobs.

The 16-country euro zone lost a record 1.22 million jobs in the first quarter, official data showed. The number of employed fell 1.2 percent year-on-year, the deepest annual drop since measurements started in 1995

Data were little better in the United States.

The factory sector in New York state shrank at a more severe rate in June than the previous month, the New York Federal Reserve said in a report.

The New York Fed’s "Empire State" general business conditions index fell to minus 9.41 in June from minus 4.55 in May. The survey of manufacturing plants in the state is one of the earliest monthly sign posts to U.S. factory conditions.

Further underlining the fragile state of the global economy, an influential economist said China would not see a rapid rebound and South Korea’s finance minister said its economy was still sliding, although the pace had slowed…

"Their (G8) stance is that we are beginning to see some green shoots but nevertheless we have to be cautious," International Monetary Fund chief Dominique Strauss-Kahn said during a visit to Kazakhstan. "The large part of the worst is not yet behind us."

Pressure has been building in the G8, particularly from fiscally conservative nations such as Germany and Canada, for plans to wind down stimulus as soon as it is no longer needed.

But ministers in Lecce differed over how quickly to start rolling back state spending plans and hiking interest rates.

Treasury Secretary Timothy Geithner indicated the United States was unlikely to tighten policy soon, saying: "It is too early to shift toward policy restraint."

According to media, France is headed in the opposite direction.

Paris plans to pump an extra 3.5 billion euros ($4.92 billion) into stimulus measures earmarked for 2010, Les Echos newspaper reported on Sunday…

This is all part and parcel of push by the IMF and the rest of our international masters to keep the gravy train running on time.

Who cares if it hasn’t worked, or whether we can afford it or not?

We must keep throwing money away. There are government programs to be launched and bureaucracies to build.

By the way, is ‘Lecce’ pronounced ‘leach’?

This article was posted by Steve on Monday, June 15th, 2009. Comments are currently closed.

2 Responses to “IMF: Must Have More Stimulus Spending”

  1. TwilightZoned says:

    “Pressure has been building in the G8, particularly from fiscally conservative nations such as Germany and Canada, for plans to wind down stimulus as soon as it is no longer needed. ”

    It will be interesting to see who and how a decision is made as to when a stimulus is no longer needed.

    Germany & Canada “fiscally conservative” nations? Oxymoron? Guess it depends on your definition of fiscally conservative.

  2. Liberals Demise says:

    “The large part of the worst is not yet behind us.”

    Are you guys “GUESSING” on this one or is it your humble opinion?


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