Thursday, March 19, 2009

IMF Says Global Recession Will Be Long

In a report issued by the IMF on the state of world economies, they come to the conclusion that the global recession will last for years and are predicting world wide growth to be negative for the first time in 60 years. The World Bank in a statement last week had the same basic conclusion. The IMF report points to Government Stimulus Spending as the medicine needed to soften the recession and prevent it from becoming an Economic Depression. The IMF and the World Bank both of the the consensus that Central Government intervention is needed by every economically advanced economy to try to stem the damage of a long lasting recession.

The Obama Administration entered office with a seemingly clear understanding of the same recommendations as the world economists at the IMF and World bank, yet they let the Republican Senators bastardize the Stimulus Bill until it came out as a tax cut for the wealthy with very little upfront spending. The watered down version of the Economic Stimulus Bill did not receive Republican support even after the Obama Administration included their backwards tax cuts. The Republican philosophy of Tax Cuts and Deregulation for the wealthy and Corporations has been proven wrong since the Reagan Administration, yet they persist in stating that tax cuts are what grows the economy and creates jobs.

As if the current economic catastrophe is not proof enough of the folly of tax cuts as a means of stimulating and growing an economy, the IMF and World Bank do not mention tax cuts as a solution to the current crisis, instead the focus of their reports are on the Central Governments spending money on modernizing their infrastructures and firming up their banking systems. The original intent of the US Stimulus Bill that the Obama Team announced before they took office was a Bill that did just that. They spoke of massive spending turning the Economy from a Fossil Fuel Based Economy into a Renewable, Sustainable, Alternative Energy Economy, which is the wise way to create jobs and build an Economy of the future.

The Obama Administration must now consider a second Stimulus Bill that focuses on the right areas of the Economy, but it will be hard pressed to announce any new Stimulus Plans because of the follies and retractions of the first plan. So, America will wallow in a deep recession teetering on the verge of Economic Depression because the Obama Administration did not stand up to the false ideas of the Republican Party.

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